[House Hearing, 106 Congress]
[From the U.S. Government Printing Office]



 
      FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS 
                        APPROPRIATIONS FOR 2000

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS
                              FIRST SESSION
                                ________
   SUBCOMMITTEE ON FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED 
                                PROGRAMS

                    SONNY CALLAHAN, Alabama, Chairman
 JOHN EDWARD PORTER, Illinois    NANCY PELOSI, California
 FRANK R. WOLF, Virginia         NITA M. LOWEY, New York
 RON PACKARD, California         JESSE L. JACKSON, Jr., Illinois
 JOE KNOLLENBERG, Michigan       CAROLYN C. KILPATRICK, Michigan
 MICHAEL P. FORBES, New York     MARTIN OLAV SABO, Minnesota
 JACK KINGSTON, Georgia
 JERRY LEWIS, California            

 NOTE: Under Committee Rules, Mr. Young, as Chairman of the Full 
Committee, and Mr. Obey, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
     Charles Flickner, John Shank, and Christopher J. Walker, Staff 
                              Assistants,
                     Lori Maes, Administrative Aide
                                ________

                                 PART 2
                                                                   Page
 Secretary of the Treasury........................................    1
 Security Assistance..............................................   69
 Military Training Report.........................................  233
 Secretary of State...............................................  281

                              

                                ________

         Printed for the use of the Committee on Appropriations
                                ________

                     U.S. GOVERNMENT PRINTING OFFICE
 57-458                     WASHINGTON : 1999



                        COMMITTEE ON APPROPRIATIONS

                   C. W. BILL YOUNG, Florida, Chairman

 RALPH REGULA, Ohio                    DAVID R. OBEY, Wisconsin
 JERRY LEWIS, California               JOHN P. MURTHA, Pennsylvania
 JOHN EDWARD PORTER, Illinois          NORMAN D. DICKS, Washington
 HAROLD ROGERS, Kentucky               MARTIN OLAV SABO, Minnesota
 JOE SKEEN, New Mexico                 JULIAN C. DIXON, California
 FRANK R. WOLF, Virginia               STENY H. HOYER, Maryland
 TOM DeLAY, Texas                      ALAN B. MOLLOHAN, West Virginia
 JIM KOLBE, Arizona                    MARCY KAPTUR, Ohio
 RON PACKARD, California               NANCY PELOSI, California
 SONNY CALLAHAN, Alabama               PETER J. VISCLOSKY, Indiana
 JAMES T. WALSH, New York              NITA M. LOWEY, New York
 CHARLES H. TAYLOR, North Carolina     JOSE E. SERRANO, New York
 DAVID L. HOBSON, Ohio                 ROSA L. DeLAURO, Connecticut
 ERNEST J. ISTOOK, Jr., Oklahoma       JAMES P. MORAN, Virginia
 HENRY BONILLA, Texas                  JOHN W. OLVER, Massachusetts
 JOE KNOLLENBERG, Michigan             ED PASTOR, Arizona
 DAN MILLER, Florida                   CARRIE P. MEEK, Florida
 JAY DICKEY, Arkansas                  DAVID E. PRICE, North Carolina
 JACK KINGSTON, Georgia                CHET EDWARDS, Texas
 RODNEY P. FRELINGHUYSEN, New Jersey   ROBERT E. ``BUD'' CRAMER, Jr.,
 ROGER F. WICKER, Mississippi            Alabama
 MICHAEL P. FORBES, New York           JAMES E. CLYBURN, South Carolina
 GEORGE R. NETHERCUTT, Jr.,            MAURICE D. HINCHEY, New York
Washington                             LUCILLE ROYBAL-ALLARD, California
 RANDY ``DUKE'' CUNNINGHAM,            SAM FARR, California
California                             JESSE L. JACKSON, Jr., Illinois
 TODD TIAHRT, Kansas                   CAROLYN C. KILPATRICK, Michigan
 ZACH WAMP, Tennessee                  ALLEN BOYD, Florida
 TOM LATHAM, Iowa
 ANNE M. NORTHUP, Kentucky
 ROBERT B. ADERHOLT, Alabama
 JO ANN EMERSON, Missouri
 JOHN E. SUNUNU, New Hampshire
 KAY GRANGER, Texas
 JOHN E. PETERSON, Pennsylvania     
                                    

                 James W. Dyer, Clerk and Staff Director

                                  (ii)



      FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS 
                        APPROPRIATIONS FOR 2000

                              ----------                              

                                         Wednesday, March 17, 1999.

                       SECRETARY OF THE TREASURY

FISCAL YEAR 2000 BUDGET REQUEST FOR MULTILATERAL DEVELOPMENT BANKS AND 
                       DEBT RESTRUCTURING PROGRAM

                               WITNESSES

HON. ROBERT RUBIN, SECRETARY OF THE TREASURY
WILLIAM E. SCHUERCH, DEPUTY ASSISTANT SECRETARY, INTERNATIONAL 
    DEVELOPMENT, DEBT AND ENVIRONMENT POLICY

                 Chairman Callahan's Opening Statement

    Mr. Callahan. Even though some of the committee people 
obviously are tied up in other meetings, we are going to 
proceed in order that we can get you out of here in a timely 
fashion and so Mrs. Kilpatrick and I can adequately celebrate 
St. Patrick's Day.
    We thank you for coming. I am happy to have a guest with me 
from my hometown, Joe Galinowsky, who is president of the local 
CBS affiliate in Mobile. He left. He met the Secretary and 
left.
    Good morning, Mr. Secretary. We appreciate your annual 
visits to explain the requests of the President and the 
executive branch with respect to your budget.
    Secretary Rubin and I spoke briefly yesterday by phone, and 
I informed him right off the bat that he could expect a 90 
percent reduction in his appropriation this year as to what he 
got last year. He gasped for a second or two, and then I 
reminded him that last year he got an additional $18 billion 
for the International Monetary Fund and therefore we were going 
to start at $20 billion and come down.
    Mr. Secretary, you are going to be well pleased with this, 
I hope, and I know otherwise that you would get up from this 
table right now and walk away.
    Secretary Rubin. That is what I was going to suggest.
    Mr. Callahan. We listened with great interest to the 
President's remarks yesterday, especially about forgiveness of 
debt. There are some on this panel who agree with the President 
that debt forgiveness is a way to enable foreign governments to 
provide more services for their citizens, but I disagree with 
that. I think we ask for no accountability of the money they 
have borrowed. Some of the monies that were borrowed by some of 
the leaders of some of the countries have either disappeared or 
were put into projects that were of such low quality that they 
only lasted a few years; for example, some roads. Now we say 
that we want to forgive all of their debt, and all this does in 
my opinion is enable these countries to do more of the same.
    We wipe their books clean, and as a result of that clean 
slate they go to the banking community and say, Well, we don't 
owe any money, let us borrow some more. I think that is not a 
wise move. If our mission is to see that these foreign 
governments, especially in the developing countries, have an 
ability to do more for their people, then we ought to consider 
direct assistance to programs that will benefit their people 
rather than enable the leadership of those countries to 
position themselves to borrow more money.
    I have seen instances where in some countries entrepreneurs 
have brought fundable projects to countries such as a toll 
bridge or something like that which would require no capital 
outlay for the countries; and the leaders of the country in a 
sense turn them down and say, Why should we float a bond issue, 
even though it would be repaid by the tolls, when indeed we can 
just go to one of the banks and borrow the money and sit around 
for a few years and then they will forgive all of the debt? I 
disagree with that, and I know you and the President disagree 
with me; and I know Ms. Pelosi disagrees with me.
    Also in the supplemental bill that we are trying to get on 
the floor as early as next week, although there is a good 
possibility we may have some problems getting a sufficient 
number of votes, we don't want to bring it up unless we have 
the votes. Because of some problems not necessarily in our area 
of jurisdiction, but in the defense jurisdiction where there 
are no offsets, it is causing some problems. We want to make 
certain when we go to the floor with a responsible bill that we 
have a sufficient number of votes to pass it.
    But we need you to, if you will, address the callable 
capital issue. You and I have discussed this, and I don't know 
whether I am right or wrong. If you wanted to bet on it, 
naturally I would take you because your background and 
knowledge of the financial community is so superior to most 
everyone in Congress, and certainly to me.
    I look at things a lot simpler than many people do. If I 
were president of one of these banks that was having this 
callable capital appropriation rescinded, it wouldn't bother me 
in the least. I explained this to the full committee last week. 
Some of us get in the position where our kids need houses and 
their financial situation is not sufficient to secure the loan 
they are trying to procure, and they come to their parents and 
say, Would you endorse a loan, and we do this in many cases. So 
we endorse a loan, but the bank doesn't say, Mr. Callahan, 
since you are endorsing this loan for your child, we want you 
to put this money in an account and not use it. They simply use 
my assets, and certainly the assets of the United States are 
still pledged. The authorization is still there. It is callable 
capital in the event that it is necessary, and it doesn't give 
me heartburn like it might give you heartburn. I see absolutely 
nothing wrong with it. I don't think it is fiscally wrong. In 
fact, I think it is fiscally right to do this because this 
money has been sitting there for a long period of time. We are 
not rescinding all of the callable appropriated capital, and we 
are not rescinding any of the authorized capital.
    So I would like for you to especially address these two 
issues sometime during your statement. And as I said, once 
again we welcome you to the committee.
    Mrs. Pelosi.

                     Ms. Pelosi's Opening Statement

    Ms. Pelosi. Thank you, Mr. Chairman. Happy St. Patrick's 
Day. I like your tie except it has elephants on it. Anyway, 
Happy St. Patrick's Day.
    I want to join you in welcoming our distinguished Secretary 
to our hearing this morning on the fiscal year 2000 request for 
$1.523 billion, of which $1.395 billion is for the multilateral 
financial institutions.
    I first want to compliment the Secretary on his 
perseverance in continuing to guide some of this 
administration's policies and the country with sound economic 
policies which have enabled this country to enjoy continued and 
steady economic growth. Our economic progress and the creation 
of budget surpluses are due in no small measure to his steady 
guidance and the respect with which he is held, and his 
involvement in this administration is something that all 
Americans are grateful for.
    Today the subcommittee will explore the fiscal year 2000 
budget request for the multilateral development banks, as I 
mentioned, of $1.395 billion for ongoing contributions and 
arrears payments. This continues a downward trend in the 
request levels for resources for the U.S. contributions for 
these institutions.
    Since 1994, the U.S. has reduced its annual commitment to 
these institutions by 37 percent, going from an annual 
aggregate budget of $1.9 billion to $1.2 billion. This has been 
accomplished without decreasing our voting shares or our 
overall influence within these institutions. And I know, Mr. 
Secretary, that you negotiated some of that standing for us. 
Thank you. I do intend to explore several bank-related issues 
today, including the need for several new authorizations; 
current lending policies to countries in economic difficulty; 
cases of alleged corruption; and the use of resources 
appropriated for callable capital as an offset to the recently 
reported supplemental for Central America which our 
distinguished Chairman went into in some detail. I have very 
serious concerns about using the callable capital as an offset 
and look forward to the Secretary's response.
    As I have mentioned in the past, Mr. Secretary, I am always 
interested in the IFIs, international financial institutions, 
in regard to the environment, as well as being interested in 
the AIDS issue. I am still clamoring for AIDS to be on the G-7 
or -8 agenda because I believe that the spread of AIDS in the 
developing world is a serious economic issue as well as a 
humanitarian issue, and I think it should rise to that level of 
discussion. I am interested in how the World Bank is addressing 
this crisis as well.
    Then we are talking about debt relief. The request also 
includes $120 million for debt relief for several initiatives, 
including the Bilateral Paris Club Initiative, contributions to 
the HIPC, and funds to support the debt for rain forest 
legislation.
    While I am supportive of these initiatives, I continue to 
believe that we need to develop and implement a more 
comprehensive policy on debt relief for poor countries which 
addresses the continued crushing debt burdens these countries 
continue to struggle with. I intend to pursue these areas in my 
questions today.
    The Chairman talked about his opposition to debt relief, 
and said I was in disagreement with him. I don't think that we 
are that far apart. I do not support debt relief to supply 
funds for governments to siphon off for whatever purpose. I 
think if we are going to have debt relief, and I do believe 
that it is an important initiative, then we have to have 
certain provisos what we expect that debt relief to engender.
    I also believe that following a natural disaster as we had 
in Central America, that we should be very supportive of the 
economic development that will happen there, in addition to our 
humanitarian assistance which is very important, but much of 
which is at the emergency stage. As we go beyond the emergency 
stage, we have to be talking about helping these countries 
thrive economically. And I think a means to that end is to have 
full debt forgiveness, instead of having some debt forgiveness 
and prolonging the agony, they will have to borrow again to 
keep up with their payments. I think if we have debt 
forgiveness it will be a giant step in the direction of the 
economic recoveries that promote market opportunities that will 
help these countries have almost a boom following the natural 
disaster that they have suffered.
    So in the spirit of hoping that we can find common ground, 
because your objections to debt relief I share, but I think we 
come down at a place where the debt relief is necessary, and if 
our lack in confidence in how the funds would be used is to 
have provisos, so be it. Let us do that.
    We are here to hear the Secretary, and the Secretary is 
well aware of the difference between the Chairman and me as we 
approach the debt relief issue. I am interested in hearing the 
view of the administration but I probably want more debt relief 
than the administration does, Mr. Callahan.
    With that I welcome you, Mr. Secretary, and thank you for 
your great leadership.
    Mr. Callahan. Thank you. Mr. Rubin, we will accept your 
statement for the record and the floor is yours, sir.

                  Secretary Rubin's Opening Statement

    Secretary Rubin. Mr. Chairman, Ms. Pelosi, let me first 
start by saying that the subcommittee played a very important 
role last year in the IMF appropriation and I do believe that 
that appropriation was critical with respect to dealing with 
the international financial stability of this past period. I 
think that without what this committee had done, the world 
might be in a lot worse shape.
    As Ms. Pelosi said, for fiscal year 2000 we are requesting 
$1.523 billion, which is an increase of less than 1 percent, 
not when you start with the IMF $18 billion, but when you start 
the other way. That request is for financing for the 
international financial institutions, debt programs and 
technical assistance.
    Just one comment with respect to the financial crisis. 
There has been a lot of discussion about whether the IMF and 
the World Bank and others have handled this crisis in a 
sensible fashion. My view is that they have faced complex, 
unprecedented issues, and on balance they have made sound 
decisions. There also has been a high level of willingness to 
be flexible and make adjustments where necessary, and I think 
they have done a good job in the face of an unprecedented, 
complex situation. I think the world is a lot better off than 
it otherwise would have been.
    Two instances of countries in which the governments took 
ownership of reform and where we see real progress--and this 
never works unless a country takes ownership of reform--are 
Korea and Thailand. I remember the last week of 1997. Korea 
then had reserves of roughly $3 to $4 billion and they now have 
reserves of $51 billion. Interest rates in Korea were as high 
as 35 percent at some point after the crisis began. Interest 
rates are now between 5 and 6 percent. Thailand has had similar 
progress. Both of these countries have lots of challenges 
ahead, but where countries have taken ownership and the IMF has 
put in place strong programs, there has been real progress.
    In terms of U.S. economic interests, as we have said so 
many times during the course of the discussion about the 
financial crisis, our economic interest is very much affected 
by what has happened in the rest of the world. And while we 
have continued to have a good economy and are likely to 
continue to have a good economy, certainly many sectors have 
been affected by the crisis and it has created an additional 
risk in the overall economy.
    Let me briefly speak regarding financial institutions and 
why they are an appropriate way to center our efforts with 
respect to both financial crisis and promoting long-term growth 
in developing countries. Firstly, they internationalize the 
burden. In 1998, $1.4 billion in American appropriations gave 
us enormous influence with respect to $57 billion in total 
multilateral development bank lending.
    Second, our fiscal year 2000 request for the international 
financial institutions is about 5.5 percent below last year's 
appropriations. Both of those years' appropriation requests 
have included payment of arrears, as you know. More broadly, we 
have negotiated under Bill Schuerch's leadership, enormous 
decreases in our ongoing scheduled requirements, which were 
something like $700 million per annum higher in the mid-
nineties. I believe that is down about 35 to 40 percent.
    Third, because these institutions are multilateral, they 
can induce or require conditionality that you could not do on a 
bilateral basis.
    And fourth, each institution has a specialty unto itself. 
We have worked very forcefully in these institutions to promote 
reform both with respect to how they operate and the content of 
the programs, including environmental, human rights and other 
issues.
    In terms of long-term growth, if you take a look over the 
last 20 to 30 years, these institutions have been central. 
There is really a very impressive record of growth in many 
countries, even after allowing for the recent crisis. Infant 
mortality rates fell by nearly 50 percent in the early 1970s to 
the mid 1990s, and life expectancy has increased by an average 
of 4 months a year on average since 1970. Adult literacy has 
risen from 46 to 70 percent. And as that has happened, these 
countries have become markets for our goods. I can remember 15 
or 20 years ago when a developing country was thought of 
basically as a recipient of aid. In 1997 they absorbed 
something in the neighborhood of 40 percent of our exports.
    As an example of international financial institution roles, 
IDA is the world's largest lender of concessional resources for 
projects in health, primary education, nutrition, safe drinking 
water, proper sanitation; and in IDA for every dollar that we 
put up, roughly speaking $8.5 is lent, and again we have 
tremendous influence in how that money is used.
    I think that does bring us to the question of the debt 
burden. Let me say, Mr. Chairman and Ms. Pelosi, I actually 
agree with both of you. I think it is a very complex issue, 
because I think it is a balancing of competing considerations. 
Yesterday, as you know, the President announced a new major 
initiative, and let me try to express our philosophy with 
respect to debt reduction. I think you will see a reflection of 
both concerns.
    Firstly, we believe debt reduction is unlikely to have any 
lasting impact unless it is accompanied by meaningful economic 
reform so that the resources freed up are used for good 
purposes rather than simply consumed in some current fashion 
and having no lasting impact. So we require that debt relief 
goes only to countries that are engaged in effective reform 
programs.
    Secondly, our approach is designed to bring debt levels 
down to what a country can reasonably be expected to afford. 
And here there is a tension, and I think the Chairman brought 
it out particularly well. Let me tell you the balance that we 
have tried to find.
    On the one hand, as Ms. Pelosi said, many countries are 
simply overwhelmed by unsustainable debt and the call on the 
country's resources makes it virtually impossible for these 
countries to grow. And we think that is a nonviable position 
for a country committed to reform to be in.
    On the other hand, as the Chairman pointed out, if the 
private sector does not believe that a country has a culture of 
credit in which borrowers are committed to repay obligations, 
then these countries will not get private sector capital, and 
private sector capital is an absolute requisite for growth over 
the long term.
    Secondly, as the Chairman also pointed out, if borrowers 
feel that they are not going to have to pay back debt, then 
they will borrow carelessly and use money carelessly. So what 
we try to do is find a sensible--and that is what the 
President's program announced yesterday carries forward--a 
sensible balance between these competing considerations. 
Obviously reasonable people can disagree where that balance 
lies, but I think the proposed framework is probably about 
right.
    In line with that analysis, we request $120 million this 
year for debt relief programs broken out as follows: $50 
million for the HIPC initiative. That is the heavily indebted 
poor countries' initiative which has been launched by the World 
Bank and IMF in 1996, and which is intended to reduce debts to 
sustainable levels for those poor countries prepared to pursue 
economic and social policy reform. And $20 million for the 
Paris Club, which you know is a multilateral process for 
bilateral debt reduction, and $50 million to finance debt 
relief for tropical rain forest countries which is called for 
under the Tropical Forest Conservation Act of 1998, which in my 
view at least is a good piece of legislation.
    We have also made great progress, under the leadership of 
this subcommittee, in paying our MDB arrears, which I think is 
very important in terms of maintaining our influence in the 
institutions. If our requests for arrears in this budget are 
fully funded, then arrears will be brought down to $141.9 
million, which is tremendous progress compared to where they 
were at their height. I believe they were at $900 million, not 
counting the money held back because of our problem with IDA 
11. So that is a lot of progress. This subcommittee obviously 
played an absolutely indispensable role in that progress.
    On the question of rescission, Mr. Chairman, I guess all I 
can tell you is a reflection of my own experience, plus my 
having spoken to some of the financial officials involved whom 
I know and respect. They say that when the underwriters and the 
regulators come to examine the multilateral development banks--
and I am particularly focusing on the World Bank now--the first 
thing they ask is what is the United States' appropriated 
callable capital, because of the concern--skittishness might be 
a better word--because of the skittishness about American 
commitment to international economic activity. There is a 
skittishness amongst the underwriters and other agencies with 
respect to our commitment, which they fear is reflected in the 
length of time that it took us to get the IMF quota increase 
legislation passed, the fact that we are massively in arrears 
to the United Nations. So what they look at is the appropriated 
callable capital, not the total callable capital.
    So it is my concern that if there is a rescission, that 
could adversely affect the perceived creditworthiness--whether 
it should or shouldn't--the perceived creditworthiness of these 
institutions; and therefore, their borrowing cost; and that in 
turn would mean less money for the countries to which they are 
lending. And that is coming at a time when we are enormously 
involved with these institutions in trying to deal with this 
financial crisis, which I think unfortunately still has a good 
way to go before it works its way through the world economy.
    In addition, it is a very negative message to send to the 
rest of the world in terms of our commitment. It is a little 
bit hard to tell how other countries would react, but it is 
possible that a rescission will cause other countries to pull 
back too. I do not know. But it is a risk, it seems to me, that 
we should not be taking at this time.
    Let me briefly mention one other item, even though it is 
not in the jurisdiction of this subcommittee anymore, and that 
is the coummunity adjustment and investment program of NAD Bank 
the ``CAP''. As you know it has been moved to another 
subcommittee, but we remain fully committed and we will be 
working hard to get appropriate funding.
    Let me conclude, if I may, by just saying that we continue 
to strongly support the international financial institutions. I 
think that they serve the American people and our economic 
interests extraordinarily well. This committee has been 
extremely constructive and central to providing that support 
that they need and we look forward, Mr. Chairman and Ms. 
Pelosi, to working with you this year as you review and 
hopefully fund our budget requests. Thank you.
    [The information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                             budget request

    Mr. Callahan. Thank you, Mr. Secretary. I know that the 
primary purpose yesterday was to speak to your budget request. 
We can't really give you any concrete answers because we don't 
know how much money is going to be allocated but I do 
compliment you on keeping your requested increase to the 
minimal level, and we certainly will consider your request when 
we finally get our allocations.
    Indications are that we are going to be suffering from an 
allocation point of view. The Budget Committee, which is 
meeting now and which will be presented to the full House and 
to the Senate maybe as early as next week, indicates that there 
is going to be a very huge shortage of money for the 
Appropriations Committee. And if that is the case, I don't 
imagine they are going to be allocating me or this committee a 
huge increase while reducing some other committees with 
domestic needs. So we will just have to address that and we 
certainly will stay in contact with you. We are also happy to 
have Under Secretary Schuerch here today.
    Mrs. Lowey. Bill.
    Secretary Rubin. Bill Schuerch.
    Mr. Callahan. He has a good educational background. He may 
be a spy, but he is a good one for you and for us.
    With respect to the callable capital, I still can't see why 
we ought to be concerned about what the regulators say. The 
facts are that the United States Congress and the United States 
of America have committed callable capital to these banks, 
period. No other country puts their money in a safety deposit 
box or a drawer on the side and says, This money is here if you 
ever need it. No other country does that, and there is no real 
reason for us to do it. The full faith and credit of the United 
States of America is in the agreement, where we agreed and 
authorized through this Congress callable monies. I don't care 
what the regulators' concerns are. I don't care about the 
skittishness of the American commitment. That sort of 
aggravates me. Since we are the number one donor in the world, 
I don't know why we ought to be concerned about their 
skittishness and the perceived creditworthiness. You put 
yourself, you put me in their position, I would say the same 
thing.
    But the reality is that it is not a reduction of the 
commitment. It is not a rescission of the commitment. The 
assets of the United States fully can back up this amount of 
money if indeed it were ever called.
    And lastly, we are taking $650 million, that is 18 percent, 
maybe 20 percent of the callable capital. If they indeed were 
to call in capital, they just wouldn't call in our capital, 
they would have to call in universal capital. We are talking 
about a huge amount of money, and also there is callable 
capital cash left there to begin with.
    So I think they are overreacting. If I were president of 
that bank, I wouldn't care. The full faith and credit of the 
United States is there in the authorization, and the fact that 
we won't put it in a side drawer or piggybank just in case they 
need it, I think that is ludicrous.
    I don't think that even stands up to good argument on their 
part. The money is not needed. It hasn't been needed for, what, 
20 years, 19 years; and why all of a sudden they would be 
concerned if we took it out of the piggybank and put it into 
something else, I don't know. But in any event, I can 
understand them saying that. But if they want to say, Well, all 
countries will have to do the same thing, that would be 
something else. But they are only saying to the United States, 
We don't trust you, we don't trust the Congress, and we feel if 
you take this cash back, even though the commitment is still 
there, we don't trust you. Well, that is too bad if they don't 
trust us.
    Secretary Rubin. The problem is not regulators. The problem 
is basically the underwriters, and you may be 100 percent 
right. It may be that there should not be a perceptual 
difference. But when you look at what is happening with the 
U.N. and IMF, you can see how people might be a little nervous.
    Mr. Callahan. Was the IMF callable capital?
    Secretary Rubin. No, but we had entered into a commitment 
to----
    Mr. Callahan. I understand that. We have authorization--
there is a big difference there because the Congress has 
authorized this callable capital.
    Secretary Rubin. There is that on the one hand. But once 
you rescind, you have to go back to Congress again. I think the 
basic problem here, Mr. Chairman, is whatever underwriters and 
worldwide creditors think. At least based on the survey that I 
have done, and I have talked to several people about this, it 
is their view that rescission would affect--and this is a 
question of people who provide capital in the markets--that a 
rescission could be perceived as a significant event with 
respect to the rates, at which money is lent to these 
institutions.
    That does not strike me as being totally irrational. In 
terms of other countries, for the most part they don't have 
this appropriation issue. Once they make a commitment, that is 
the same as both our authorization and appropriation of 
callable capital. In other words, they don't have the interim 
problem of having to go back to a Parliament. So basically they 
are in the same place we are with respect to our appropriated 
callable capital.
    Mr. Callahan. It is a difference of opinion, but it is 
aggravating to me that they would say they don't trust the 
appropriators. What they are saying is that we are not going to 
require any other country--some of them are in real dire 
financial straits, and they are not considering that some 
detriment to the bank.
    Secretary Rubin. The people whose capital depend on the 
institutions aren't the developing countries. They are the 
major industrial countries. It is not the World Bank and the 
others that are the ones whose views matter. It is the 
underwriters, the creditors and to some extent the rating 
agencies. This is not a criticism of or a comment on the banks. 
It is a comment on those who fund the banks, the rating 
agencies who rate them, and the underwriters who raise the 
money.
    Mr. Callahan. I think if I were a bank, I would rather have 
it in a lockbox or side drawer someplace, but it wouldn't 
affect my judgment as to whether or not the bank was solvent or 
whether or not it was actuarially sound. I disagree with them. 
We will discuss that as we go further into the day.
    Mrs. Pelosi.
    Ms. Pelosi. Thank you, Mr. Chairman. Mr. Chairman, how are 
we proceeding?
    Mr. Callahan. We are going to keep to the 5 minutes so we 
make sure that everybody here--if you think you are going to be 
longer than 5 minutes--I wasn't longer than 5 minutes.
    Ms. Pelosi. I will take the same 5 minutes you did.
    Mr. Callahan. Fine.
    Ms. Pelosi. Thank you, Mr. Chairman. I just want to follow 
up on your line of questioning and have the Secretary continue 
on a track that he was on before.
    Mr. Secretary, you said the skittishness that you referred 
to calls the commitment into serious question. Can you comment 
further on how additional borrowing costs could hurt the banks 
in terms of restricting new lending and funding debt relief 
initiatives?
    Secretary Rubin. The World Bank has a triple A rating. That 
is a very rare rating in today's international financial 
markets. If there were qualms about the triple A rating, the 
bank could still be viewed as a very good credit risk, but not 
triple A. That would substantially increase the cost of money 
to the bank.
    If a lower rating increased the cost of money, the Bank's 
resources would have to be used to pay the higher cost of 
capital, and that means less money would be available to use 
for developing countries that they try to assist.
    Ms. Pelosi. I have a couple of odds-and-ends questions.
    Secretary Rubin. Mr. Schuerch points out that a lower 
rating would particularly affect IDA, because IDA is funded in 
some measure by transfers from the IBRD.
    Ms. Pelosi. I just have serious concerns about using this 
callable capital as an offset because I think it could----
    Secretary Rubin. I would say this.
    One of the concerns that I had about the proposed 
rescission, and I know that it is a concern that others have 
had that focus on this issue, is that once the callable capital 
is seen as available and perhaps a source of budget authority 
that does not carry a lot of consequence, that there are others 
in Congress who might decide they would like to use it too. And 
I think that there is little doubt that if this spread and 
really took the whole $12 billion of appropriated callable 
capital that is available for whatever purposes, I think you 
really do run a substantial risk of having a substantial 
adverse impact on the perceived creditworthiness of these banks 
and would substantially increase the cost that they would have 
to pay to borrow money.
    Ms. Pelosi. I appreciate your response. I think that 
anytime that that resource is put in doubt, it diminishes 
confidence, and confidence is a large part of what we are 
progressing with.
    Secretary Rubin. It is a particularly bad time to have that 
happen, given that we are still very much coping with the 
question of confidence with respect to global financial 
markets.
    Ms. Pelosi. And particularly the Asian financial crisis to 
go to the Asian bank. A couple of odds-and-ends questions, and 
then we will have another round.
    Mr. Secretary, what is the status of the advisory committee 
to be established by Treasury to give advice to the IMF on IMF 
policy as mandated by the bill enacted last year? When will the 
members be announced and when will the first meeting take 
place?
    Secretary Rubin. There are two committees that we were 
required to set up. Are you referring to the one that advises 
me.
    Ms. Pelosi. Why don't we talk about both of them.
    Secretary Rubin. For one of them, the Advisory Commission, 
the members are appointed by Congress. For the other, the 
Advisory Committee, the members are appointed by the 
administration. We have selected the members of the Committee. 
Have we named them yet? It is not public yet. I guess we are 
doing vetting. We have made our choices and we conferred with 
labor and environmental groups and all of the relevant 
constituencies that were involved, and we have a good group of 
people that the constituencies that are supposed to be 
represented will be pleased with.
    In the case of the Commission the other advisory group 
where the members are appointed by Congress, I don't----
    Ms. Pelosi. Some are.
    Secretary Rubin. Bill points out that the Democrats have 
appointed their members, and the Republicans are in the process 
of doing that.
    Ms. Pelosi. Hopefully that will move along and we can use 
our moral suasion that we have work to do and need the 
commission report.
    I mentioned in my opening remarks about the global AIDS 
issue. In recent years the pandemic has been sort of on the G-7 
agenda. Can you tell us what has resulted from these 
discussions and if AIDS will be on the agenda again this year?
    Secretary Rubin. I----
    Ms. Pelosi. I am asking very abbreviated forms of my 
questions in the interest of time, Mr. Chairman.
    Secretary Rubin. I think if you look at Africa, AIDS has 
become as significant as any other impediment to economic 
growth. There are countries that have 20 percent rates now of 
HIV-positive, and that is a horrible human tragedy. It is also 
a horrendous economic development problem.
    The World Bank is very focused on dealing with AIDS. And 
particularly as I understand it, they are focused on education 
and preventive measures. There is one country that I can 
recollect that has put in place a significant education program 
and they have reduced the HIV infection rate from 30 to 10 
percent in a 5-year period.
    Ms. Pelosi. I will submit these questions for the record 
because they are very specific about this issue, but as a 
supporter as I am of the World Bank, I was concerned that the 
GAO report was critical of the World Bank for not cooperating 
with the U.N. AIDS program, and I hope that you will convey the 
high priority that this issue has here to the World Bank.
    Again, I say that with the highest regard for the World 
Bank, but it is just an issue of collaboration.
    Secretary Rubin. They are very focused on AIDS. If they are 
not cooperating with the U.N. program in some fashion, we can 
follow up on that.
    Ms. Pelosi. Thank you, Mr. Chairman.
    Mr. Callahan. Mr. Packard.
    Mr. Packard. Thank you, and thank you for appearing.
    I share the same views on debt forgiveness that the 
Chairman has spoken to. I have concerns. Your heavily indebted 
poor countries, how does a country get on that list?
    Secretary Rubin. By having a lot of problems. The 
definition under existing programs would be a country having a 
ratio of debt-to-exports in excess of 200 percent, and they 
also have to have a poverty rate such that they would qualify 
for IDA which means an average per capita income of $950 a year 
or less. So they have to be poor and heavily indebted.
    Mr. Packard. How many countries are listed in that group?
    Secretary Rubin. My recollection is that there were 41 
which by----
    Mr. Schuerch. Forty-one by the poverty criteria.
    Secretary Rubin. Forty-one by poverty and 23 by 
unsustainable burdens of debt, not counting the additions that 
would occur as a result of the program the President announced 
yesterday. Is that correct, Bill?
    Mr. Schuerch. Yes.
    Mr. Packard. Any of the larger countries that we do a lot 
of lending to on that list, Brazil, Russia, Ukraine?
    Secretary Rubin. No, none of those. In fact, you will find 
that a lot of the countries are sub-Saharan African countries.
    Mr. Packard. One of my concerns is that with a very loose 
requirement and monitoring of debt relief, there is so much 
corruption in many of these small countries it could be an 
incentive to further corruption rather than a disincentive, and 
that is a great concern.
    Secretary Rubin. I think your point is exceedingly well 
taken. One of the factors that gets looked at with respect to 
reform is corruption. In the program that the President 
announced yesterday, although he didn't say this, one of the 
factors that is involved in getting the deepest debt reduction 
would be effective programs to a deal with corruption. So your 
point is well taken.
    Mr. Packard. A totally separate question. In my part of the 
country, NAD Bank is very important down near the Mexican 
border and San Diego area. I am not sure that we have lost 
jurisdiction as a committee. I don't know where that stands as 
of yesterday, but be that as it may, the United States and 
Mexico have put close to a half billion dollars into that 
program, and it is hopefully to be used to leverage and finance 
up to $3 billion of environmental projects.
    To date, very few projects have been funded by the NAD Bank 
even though the money has been there and of course the mission 
has been there. And, frankly, the environmental problems at the 
border are worse today than when we started NAD Bank, and are 
still further deteriorating. If we were to evaluate the program 
from that point of view, it would have been a failure. I have 
been supportive of NAD Bank and I will continue to do so, but I 
really believe that it needs to be used for its mission.
    Can you address what is being done and what can be done to 
make sure that money is funded for projects which are going to 
solve the environmental problems?.
    Secretary Rubin. My impression is that on the environmental 
side it was a little bit slow in getting up, and these are 
complicated projects and it takes time to get them going. But I 
think they are moving at a better rate now.
    Why don't you respond, Bill?
    Mr. Schuerch. I went down to the NAD Bank's annual meeting 
and we had a public hearing. The management has been focusing 
and will continue to focus next year on pushing implementation 
of the projects that are in the pipeline. There has been quite 
a bit of success. It is a difficult job, but I will have to say 
that the tone of the comments in the public hearing was 
remarkably different from what we have heard in prior years. 
Most of the speakers came forward and were quite complimentary 
of the focus on implementation now, although they were 
dissatisfied a year ago and 2 years ago.
    So I think we have at least the start of the turnaround in 
that problem and we are certainly focused on it.
    Mr. Packard. Certainly this Congress will become more 
complimentary as we see results, and I hope you are right.
    Secretary Rubin. On the community development side, we have 
made real progress in moving money out the door. That is now in 
the jurisdiction, I think, of the Treasury, Postal 
Subcommittee. Treasury has nothing to do with the jurisdiction 
issue but that is my understanding.
    Mr. Callahan. We are going to go down the line, but Mr. 
Obey has to leave by 11:20 so if we don't reach him, we are 
going to have to jump over the line. Mrs. Lowey.
    Mrs. Lowey. I will be happy to defer to----
    Mr. Obey. I just want to see what is up first.
    Mrs. Lowey. We only have 5 minutes, and I will move 
quickly. I want to join my colleagues in welcoming you, Mr. 
Secretary, and we are very proud of your outstanding record. 
And Mr. Bill Schuerch, as Deputy Assistant Secretary, we are 
delighted to see you.
    Secretary Rubin. We just refer to him as our leader.
    Mrs. Lowey. He has been our leader for many years, and we 
are delighted to see him here.
    There has been a good deal of discussion this morning on 
callable capital, so I think I will get on to some other 
issues, but I know that it does warrant further discussion and 
exchange of ideas. I just do want to say, as a key advocate for 
paying our United Nations arrears, there may be some questions 
about the United States paying its debts. In all of my 
discussions with many advocates, it is absolutely a shame--and 
this committee is not responsible for that--but I think it is 
shameful that we have not paid our United Nations dues. To 
think that by the end of the year we will lose our vote in the 
General Assembly under Article 19. If we don't pay our arrears, 
it may put in question the faith and credit of the United 
States and our commitments.
    But to move on to another issue, I just wanted to talk a 
little bit about GEF the Global Environmental Facility because 
the house bill also included a rescission of $25 million for 
GEF, and the Senate bill included a $60 million rescission for 
GEF.
    Can you let us know the impact these cuts would have on the 
critical conservation work that GEF is engaged in? In fact, I 
believe the United States is already $35.8 million in arrears 
to GEF before this rescission?
    Secretary Rubin. That is right, Mrs. Lowey. For FY 2000 we 
are requesting $35.8 million of the $107.5 million which we 
currently are in arrears to the GEF. I think GEF performs a 
unique function in dealing with environmental problems and 
cross-border effects, which no one country has the full 
incentive to deal with and yet the globe certainly does.
    It is our judgment that there shouldn't be any rescission 
with respect to GEF. I guess I would have to say while that 
would certainly be our preference, some rescission may be 
absorbable. But at 60 million you get to a level that could 
have a significant impact on a very important program. And as 
you know, we are very much opposed to that level of rescission.
    Mrs. Lowey. Following up on the impact the rescissions will 
have on GEF, I want you to discuss further the work that GEF 
does to help American businesses trying to compete in the 
global marketplace. How does GEF combat the competitive 
disadvantage that American businesses face as a result of weak 
environmental laws in other countries?
    Secretary Rubin. I think it actually serves an even broader 
purpose, and that is when you have problems in tropical rain 
forests and you have other environmental problems around the 
world, the effects fall on us as well as on the countries in 
which the problems take place; and yet these countries have 
neither the resources nor the incentive to fully fund solutions 
to the problems that they have, because these problems, while 
originating in these countries, have effects that go much 
beyond those countries. And that is what GEF deals with.
    GEF also, by promoting environmental investment, is a very 
important source of purchasing power with respect to 
environmental equipment and we are the world's leader in the 
provision of that kind of equipment.
    Bill, would you like to add anything?
    Mr. Schuerch. Yes. GEF spends a considerable amount of 
resources also on helping Third World countries develop plans 
and work through participatory processes with civil society 
organizations so you build a base in support of environmental 
activities, and this goes towards moving legislation as well as 
getting them to have the same types of values and interests 
vis-a-vis environmental activities as the United States does. 
But it is a longer-term process, it is not an immediate 
process.
    Mrs. Lowey. I thank you. Another area that we have 
discussed in the past is health and education. Last year a 
number of us raised concerns about a drop-off in World Bank 
lending for help in education. And I am happy to see that since 
then, the World Bank has increased its commitment and has lent 
over $5 billion for health and education in 1998. And I just 
wanted to commend you and the World Bank president, Jim 
Wolfensohn, for your commitment to this issue.
    Could you perhaps discuss with us briefly the work that you 
are continuing to do and you are planning to do with the World 
Bank to ensure that education and health care continue to 
receive the high priority that they deserve?
    Secretary Rubin. We recently met with Jim Wolfensohn and 
his principal deputy, I have forgotten exactly when. Some of 
the priorities of the World Bank which we discussed were 
education, health care, the other social programs that underlie 
a market-based economy, and I think it would be fair to say 
that they have over time reoriented their focus, and that is 
why there were the improvements in 1998. They have reoriented 
their focus away from large construction projects toward what 
we think are more fundamental requisites for a successful 
modern economy.
    Mrs. Lowey. Thank you. Thank you, Mr. Chairman.
    Mr. Callahan. Thank you. Mr. Knollenberg.
    Mr. Knollenberg. Mr. Secretary, good morning. I have a 
couple of follow-up questions on the GEF issue which was raised 
by my colleague, Mrs. Lowey.
    Since its establishment, the U.S. has contributed well over 
$200 million to GEF, and last year's omnibus appropriation bill 
increased by funding $192.5 million.
    Secretary Rubin. Which was arrears.
    Mr. Knollenberg. With regard to GEF, I have some serious 
concerns about this organization in that it may be used by 
those outside of our government who wish to implement policies 
that have not yet become U.S. official policy. Of course. I am 
referring to GEF's possible designation as a primary funding 
mechanism for the global climate control issue, and its newest 
incarnation which is the Kyoto Protocol, which, as you know, 
has not been ratified by the Senate. I am concerned that almost 
half of the GEF funding is channeled through nongovernment 
organizations that are strong advocates of the Kyoto Protocol. 
I am concerned that this flawed treaty fails to reduce 
greenhouse gases, very honestly, but just relocates them. As 
you have heard many times, it will have a devastating impact on 
the American economy.
    Can you assure this committee that GEF will not be used to 
fund any activities under the Kyoto Protocol?
    Secretary Rubin. Two comments if I may, and then let me see 
if Bill would like to add anything.
    The $192.5 million that you referred to last year was all 
for repayment of the arrears. If part of that amount is 
rescinded, then our arrears will increase by that amount.
    On the question of Kyoto and climate control, GEF, as I 
understand it, has been involved with climate control but none 
of its activity has been affected by the Kyoto Protocol. At 
least that is my understanding.
    Mr. Schuerch. The Climate Convention was passed in the 
Senate in 1992. So in terms of U.S. policy, activities under 
the Climate Convention are appropriate things for GEF to be 
doing, and they are funding those.
    Kyoto has not passed, and in fact as we understand Kyoto, 
there are no additional types of new activities that GEF would 
be required to do under the Kyoto treaty. We had the head of 
GEF, an American, Mohammad T. El-Ashry, up to brief staff, and 
he made precisely the assurance that you have asked us to make, 
which is that they will not be funding new activities under the 
Kyoto treaty. They have no intention of doing so.
    Mr. Knollenberg. With respect to the announcement yesterday 
by the President, new initiatives, the concern about this debt 
relief for the heavily-indebted poor countries, one of the 
steps that I see that is outlined here in this report indicates 
that under the innovative approaches, one such step would 
channel resources into environmental protection.
    And again I raise the question because it is mentioned 
here. It is mentioned that there will be debt for nature swaps 
in particular, and I would like to have you comment further on 
these activities that are anticipated will be included in any 
activities in conjunction with the Kyoto Protocol, and anything 
at all that would have to do with implementation of the 
protocol relative to the debt for nature swaps. I am not real 
clear what that means. Maybe it is not understood just yet what 
the focus of that means, but if you would comment, please.
    Secretary Rubin. I can give you this response, and then we 
can ask Bill to expand on it. Having spent a lot of time 
working on developing this initiative, we can state that nobody 
in the course of that discussion ever mentioned the notion of 
using the debt for nature swaps as a way of implementing the 
not-yet-ratified Kyoto convention, but there are debt for 
nature swaps right now that operate in Latin America, if I 
remember correctly, and I think it is a very successful 
program. The idea is to relieve debt payments on the condition 
that the resource is used for various purposes, and one of them 
is various kinds of environmental purposes.
    Mr. Schuerch. It is not just swaps in that program. The 
prior debt reduction activity, the major one produced by the 
last administration in Latin America, not from swaps but from 
buybacks and other activities, a set of local panels which then 
apply local currency that is generated from the debt reduction 
to conservation activities. They are types of activities like 
generating jobs in communities around national forests or 
tropical forests so people are less likely to cut down forests 
and things of that sort. None are oriented toward Kyoto treaty 
activities to my knowledge.
    Mr. Knollenberg. You understand my concern that once the 
money gets out of the hands of any kind of U.S. control, and it 
does, there may be little that you or anybody can do to curtail 
expenditures on behalf of a policy to advocate implementation. 
That is my real concern.
    I understand that the intent is not there, but do we really 
have total scrutiny and oversight over what those monies are 
spent for? When they leave our hands and our control, how do we 
know that they are not being spent?
    Secretary Rubin. You always have that problem with any of 
the national financial institutions and even debt relief 
initiatives; but I think one thing that should give you some 
comfort is that these countries are involved on an ongoing 
basis with World Bank, the IMF, regional multilateral 
development banks, and if funds are improperly used, then that 
affects what they get going forward. And in most cases they 
have programs that are given out in tranches, so you have the 
subsequent tranches as your enforcement mechanism.
    Mr. Knollenberg. My time has expired, and I appreciate the 
response. Thank you.
    Mr. Callahan. We are going to continue to go down the line 
with Mr. Jackson next, but I want to tell you, Mr. Obey, this 
timetable you put on us is helping things. Maybe at each 
meeting you can come in and tell me where you have to be in 30 
minutes.
    Mr. Jackson for 5 minutes.
    Mr. Jackson. Thank you, Mr. Chairman. And thank you, Mr. 
Secretary, for your testimony this morning. My questions center 
in the first round around multilateral development banks.
    The African Development Bank has had management problems in 
the past, but I know under new leadership they have worked hard 
to make institutional reforms, reforms which have improved the 
overall health and the bottom line of the bank. I am happy to 
see that the President and you have responded to these reforms 
by including $5.1 million for fiscal year 2000, the first of 8 
fiscal year installments.
    Can you speak about some of the reforms at the bank, 
discuss the current health of the bank and talk about the dire 
need for these funds?
    Secretary Rubin. Let me ask Mr. Schuerch to do that. But 
let me start out with, first, noting the role the United States 
has played in turning the bank around. First we said we would 
discontinue funding the African Development Fund until its 
management got straightened out a little bit. We played a very 
active role. I met with the new president of the African 
Development Bank, and the U.S. played a very active role in the 
reform program for the bank and the fund.
    I must say, having sat and talked with him and his staff 
when I was in Africa, I certainly came away with the feeling 
that they had a good sense of their mission and how they were 
going to try to implement their mission. So we have recommended 
substantial funding, and last year we got a good appropriation 
for the African Development Fund.
    Mr. Schuerch. It is about 4 years ago now we went through 
the process. Funding was cut off for the bank. A new president 
was brought in. Activities were undertaken to strengthen their 
credit judgments so that countries that were able to repay 
received bank hard loans and not soft loans. And countries that 
were not able to pay received soft and not hard loans, which 
was part of the problem that was going on. So their risk 
judgments were improved substantially and put in line with 
those of the World Bank.
    I would also say that a significant number, I think the 
number is in the range of 70, of the upper leadership of the 
bank were removed in the process under the new presidency and 
have been replaced. The quality of the staff is considerably 
improved.
    In this latest round of negotiations, we have structured 
the capital increase for the bank in such a way that the 
contributing countries have a stronger presence and voting 
power, and there is a voting structure such that major 
decisions within the institution cannot go forward without at 
least two of the developing nation chairs in favor of them. I 
think that is a big improvement from where we were.
    Also in the IDA 12 negotiations and the negotiations on the 
African Fund, we have pushed the two organizations together to 
develop a memorandum of understanding and a closer working 
relationship, and some staff programs where they work back and 
forth between the institutions, so we are hoping that this will 
also make a big difference.
    Mr. Jackson. Thank you, Mr. Schuerch.
    Mr. Secretary, the African Development Fund helps the 
poorest of poor countries. The fund has made some sound policy 
commitments under its Aid for Replenishment. Can you speak 
about some of the recent commitments that the U.S. has made 
with the AFDF and the results of these commitments?
    Secretary Rubin. The fund has made to specific African 
countries?
    Mr. Jackson. Yes.
    Secretary Rubin. Bill, do you know?
    Mr. Schuerch. I don't think that I can go country by 
country and how much the lending program has been.
    Mr. Jackson. Maybe some of them.
    Mr. Schuerch. In the process of the new program, I want to 
explain the change that is in your budget, if I can take this 
opportunity.
    In the past replenishment, we had some one-time events. 
Italy was clearing up arrears. So there was a large payment.
    There was also a cleaning up of the portfolio from past 
projects that people felt were no longer appropriate. That 
released a significant amount of resources. So while the budget 
has a significant increase for the fund, it is in the context 
of a lending program that continues on the course of the most 
recent lending program for the same poorest countries in the 
region.
    Mr. Jackson. Mr. Secretary----
    Secretary Rubin. I would also add if I may, Mr. Jackson, 
another thing that has been done, and I think very 
constructively, the donor countries have a larger role in the 
management of the bank, or rather in the control of the funds 
of the bank, which should help keep these institutions on the 
performance track that they are on.
    Mr. Jackson. Mr. Secretary, regarding the World Bank for 
just a moment, I am wondering does the U.S. use and insist its 
voice and vote to ensure that internationally recognized 
workers' rights are upheld, and are there any recent situations 
where the World Bank has disregarded the U.S.'s voice and vote 
and lent money to a country with questionable labor practices?
    Secretary Rubin. We have been very active in promoting core 
labor standards and in the 12th replenishment for IDA, which is 
the now pending replenishment, core labor standards have become 
one of the central factors in loan programs.
    In addition, we have had the World Bank and the ILO, again 
in the 12th IDA replenishment, develop working relationships so 
they can better promote core labor standards. And I think it 
would be fair to say that the United States really has been by 
far and away the most forceful advocate with respect to core 
labor standards in the World Bank community.
    Mr. Jackson. Are you aware of any instances where the World 
Bank has ignored the voice and vote of the United States with 
respect to core labor standards?
    Secretary Rubin. I don't know of any, but there might be 
some. We can get back to you on that, Mr. Jackson.
    [The information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Secretary Rubin. As you may well know, we have been very 
strong advocates with respect to core labor standards. There 
are many countries that don't share our views.
    Mr. Jackson. Thank you, Mr. Chairman.
    Mr. Callahan. Ms. Kilpatrick.
    Ms. Kilpatrick. Thank you, Mr. Chairman, and thank you, Mr. 
Secretary.
    I first want to say thank you for your staff, who spoke 
with me regarding the very complicated structure of debt and 
multilateral development banks and the like. I just want to say 
to Mr. Schuerch that I need at least two more of those sessions 
so I can speak more intelligently on it. Thank you for coming. 
And I am serious, I would like to follow up.
    There have been some discussion about U.S. arrears to the 
U.N. and what might happen at the end of the year as a result 
of our failure to pay. How likely is that? Would you comment.
    Secretary Rubin. Well, the U.N. arrearage is something that 
the State Department deals with and not Treasury. I would 
repeat what Mrs. Lowey said. I think it is in our interest, our 
national security and our economic interests, and our general 
place in the world, that we pay our U.N. arrearages. To the 
best of my knowledge, we are the only major economy that is in 
arrears to the U.N., and that to me is a nonsensical position 
for us to be in just in terms of our own self-interest.
    Ms. Kilpatrick. It is. As we discussed today, with both the 
multilateral arrangements that we have and the foreign impact 
that we make, it seems to me that we cannot even behold, unless 
we pay those.
    Secretary Rubin. Another problem that we have, and I have 
actually seen this in some of the activities that I have been 
involved in, how you handle yourself in each piece of the 
international----
    Ms. Kilpatrick. It all fits. It is part of a major puzzle 
and any piece missing----
    Secretary Rubin. You are absolutely right. It affects how 
you are perceived with respect to the others.
    Ms. Kilpatrick. On the issue of the gold that the IMF wants 
to sell, will we lose authority as we sell this gold? How are 
other countries impacted, the U.S. in particular, as we sell 
the gold?
    Secretary Rubin. Congress, as you know, has to approve that 
sale by the IMF.
    Ms. Kilpatrick. What about autonomy? Will they be more 
autonomous or less after selling this gold?
    Secretary Rubin. That is an interesting question. I don't 
think that it will affect their autonomy. What it will do is 
take a certain amount of the gold--it is an asset with no 
income--and convert it into cash which is converted into some 
kind of a security, I presume triple A short-term debt 
security, which has an interest yield which can be used to help 
fund the HIPC initiative.
    Ms. Kilpatrick. That is how IMF gets its money; it is 
backed by gold, is it not?
    Secretary Rubin. The gold is part of, if you will, the 
credit backing of the IMF which secures, for example, their 
obligations to the United States. But the value of the asset 
will not be diminished; it will be changed on the balance sheet 
from gold to an interest-bearing security of some sort.
    Ms. Kilpatrick. That is given to whomever we send it?
    Secretary Rubin. The interest-bearing security will sit on 
the balance sheet, and the interest that it pays will then be 
used to help fund the debt relief initiatives of the IMF, but 
there will be no change in the creditworthiness of the IMF 
because the asset is simply being changed from gold to what I 
presume will be a triple A interest-bearing security of some 
sort.
    Ms. Kilpatrick. Should we be worried about whether the U.S. 
and other countries will have more or less control or will it 
stay the same?
    Secretary Rubin. It is a good question. The reallocation of 
the assets on the balance sheet should not affect our ability 
to influence the IMF.
    Ms. Kilpatrick. The discussion about the $18 billion that 
finally was added to the IMF last year----
    Secretary Rubin. There, I think, had we not provided the 
$18 billion, we would have had an enormously diminished role in 
terms of our ability to influence the IMF.
    Ms. Kilpatrick. You mentioned earlier concessional debt. 
How is a country eligible for that? What criteria is used?
    Secretary Rubin. The suggestion the President is making 
with the concessional debt--you mean bilateral concessional 
debt?
    Ms. Kilpatrick. Yes.
    Secretary Rubin. Eligibility is predominantly based on 
poverty. The President suggested or has recommended in this new 
debt initiative that countries around the world do what the 
United States has been doing, which is to provide our aid 
predominantly in the form of grants, not concessional debt, so 
you don't build up the debt levels for countries who already 
have a difficult debt service problems.
    Mr. Schuerch. This is one area where the United States 
distinguishes itself from some of the other countries in the 
debt programs. In 1985 there was a decision in the Congress to 
no longer make large amounts of AID loans or economic support 
fund loans such as had been provided in past years. So the U.S. 
stopped being a participant in increasing the amount of debt 
for the most part although there are still agriculture loans 
and some other programs.
    So the U.S. has a very high grant element in its program. 
There is a loan program at AID now, and it is the housing 
program, but it is not one that goes to the poorest countries. 
It goes to a class of countries somewhat higher up.
    Ms. Kilpatrick. As we move to grants instead of loans, are 
other countries following suit?
    Secretary Rubin. We actually, as Bill says, have moved to 
grants instead of loans, which is sound, so you don't have the 
debt burden. There are many other countries which give most of 
their aid in the form of loans, not grants, and in some 
countries those loans tend to be tied to trade requirements 
which we think is yet another less desirable way of providing 
assistance.
    Ms. Kilpatrick. Thank you.
    Secretary Rubin. We would like to see the whole 
international system be predominantly grants.
    Ms. Kilpatrick. Thank you, Mr. Chairman.
    Mr. Callahan. Mr. Sabo.
    Mr. Sabo. Thank you, Mr. Chairman, and I welcome the 
Secretary. It is good to see you again.
    Secretary Rubin. It is very good to see you.
    Mr. Sabo. Let me just express that I share your concern 
over what we are doing with callable capital. Clearly, in my 
judgment, it has to do some negative things for the 
international banks, and at the same time it doesn't do what we 
pretend that it is doing. We are proceeding under the 
assumption that we can't fund emergency bills, which I think we 
should be able to fund; but then we are saying that we are 
paying for them, but we really aren't, because we are not 
offsetting the actual outlays, which are what our budget limits 
are.
    Mr. Chairman, if I might use your example, I think it is as 
if I signed a guarantee on a $100,000 mortgage for one of my 
kids and then decided that I wanted to buy a $30,000 car, and I 
would send a letter to the bank, saying ``Sorry, I am cutting 
the guarantee to 70,'' and think that somehow that gave me 
$30,000 to spend, when in reality all I would have done is 
upset the guarantee, make the bank very uneasy over the loan to 
my kid, and not have $30,000 to go out and buy the car.
    Mr. Callahan. He has let facts stand in the way of his 
judgment.
    Mr. Sabo. I think that is what we are pretending we are 
doing here. We don't offset any outlays, but potentially create 
problems with guarantees. That to me is sort of the worst of 
all worlds. This whole world is new to me. This is the first 
time that I am on this subcommittee.
    What is a relative amount of bad debt for international 
organizations? I have no sense what----
    Secretary Rubin. It is an interesting question. There are a 
lot of ways of approaching it. For example, my recollection is 
our publicly-held debt to GDP ratio is about 44 percent now. It 
was about 50 percent when the President was elected.
    We can give you something in writing on this. It is a 
complicated question. Usually people measure the debt levels 
relative to export earnings.
    Mr. Sabo. I am thinking of the relative loans outstanding, 
say, from the World Bank. What is a ratio of loans that might 
be to countries where we are considering debt relief?
    Secretary Rubin. The ratio of loans--I am----
    Mr. Schuerch. Let me try and answer that question.
    If you look at the countries that are debt relief 
candidates, HIPC eligible or potentially eligible countries, 
most of them are IDA countries. In some cases we have countries 
that did borrow at one time from the hard loan windows and 
slipped back. But overwhelmingly, the countries have borrowed 
highly concessional lending from the soft loan windows.
    Mr. Sabo. Let me try to rephrase it.
    Secretary Rubin. I don't think that we have answered your 
question.
    Mr. Sabo. In loans outstanding by the World Bank?
    Secretary Rubin. What percentage would be relieved under 
HIPC?
    Mr. Sabo. What is the scope? What percentage?
    Secretary Rubin. I don't know the answer to that. You are 
saying what percentage of World Bank loans would be relieved 
under HIPC?
    Mr. Sabo. Yes; which are potentially troublesome and in 
need of relief.
    Secretary Rubin. It is a relatively small percentage, but 
what that percentage is, I don't know. We can get back to you 
on that. But it is a relatively small percentage of total 
loans.
    Mr. Sabo. What about unilateral loans which we may have 
outstanding in this country?
    Secretary Rubin. Our recommendation is that 100% of the ODA 
loans would be forgiven.
    Mr. Sabo. What are ODA?
    Secretary Rubin. Those are the loans which we were talking 
about before, concessional loans that are part of aid. We have 
already forgiven a lot of those loans. To the extent that ODA 
loans still exist, our suggestion is that they be fully 
forgiven for countries that are involved in effective reform 
programs.
    Mr. Sabo. So we have very little unilateral debt?
    Secretary Rubin. We also have nonconcessional debt. Do you 
know what the number is?
    Mr. Schuerch. I believe the number is just under $2 billion 
for the HIPC 40 countries.
    Secretary Rubin. I think it is $1.9 billion for the 41 
countries that meet the poverty test, and there are only 23 
countries--we can get you those numbers.
    Mr. Callahan. I think it would be good to submit this to 
the committee for the record.
    [The information follows:]

                       Amount of HIPC Debt Relief

    Question. How much IFI debt and USG debt is potentially going to be 
treated under the HIPC program?
    Answer. Attached is a table showing total outstanding debt of all 
41 heavily indebted poor countries. Under the current HIPC initiative 
prevailing at the time of this hearing, we estimate that $1 billion in 
debt owed to the USG by 23 countries would be forgiven and about $16 
billion would be forgiven by all the IFIs. These figures are additional 
to the amounts already forgiven by the Paris Club under Naples Terms 
(67%) before HIPC forgiveness.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Sabo. I thank you.
    Secretary Rubin. But again it would be a relatively small 
percentage of the total bilateral debt we have outstanding.
    Mr. Callahan. Mr. Obey.
    Mr. Obey. Mr. Secretary, let me say I want to thank you for 
your service to this country. I really do believe that you are 
the best Secretary of the Treasury that I have dealt with in 
the 30 years that I have been in the Congress.
    Secretary Rubin. Thank you.
    Mr. Obey. I am a little concerned about the fellow sitting 
next to you. I think he has somehow wound up on the wrong side 
of the table. Are you sure you are not supposed to be back up 
here, Bill?
    Secretary Rubin. I think he feels that he has descended 
since he left working with you, Mr. Obey.
    Mr. Obey. Lucky to escape, probably. I would like to talk 
about your debt forgiveness proposal for a moment. I know that 
this is different because we are talking about official debt 
here versus commercial debt that I am going to refer to, but 
there is a linkage.
    Back a number of years ago after the Iron Curtain fell, we 
had a very large question as to whether or not Eastern European 
countries that were trying to move away from the Soviet sphere 
would be able to survive or not. And to facilitate that 
survival, this committee on a bipartisan basis made clear to 
the administration that we would be highly reluctant to fund 
the European Development Bank unless there was a significant 
amount of commercial debt relief for Poland. I don't remember 
how much debt relief that was.
    Bill may remember. Do you, Bill?
    Mr. Schuerch. I am not sure that I remember the gross 
quantity. A $5 billion number I think represents the 50 percent 
reduction that occurred on the private side, so the $10 billion 
I think is the total commercial side of that transaction.
    Mr. Obey. I would simply ask this: What chance would Poland 
have had to really develop its economy and get ahead of the 
curve if the West had not engaged in that debt reduction?
    Mr. Schuerch. I think the main point in the case of 
Poland--and I would say the HIPC program is in some case 
modeled after the Poland experience--is that reform was 
required of the country as they got debt relief in a tranched 
process. So final and full debt relief for the percentages that 
were envisioned occurred at the end of the process, but there 
was some relief as it went along. But what was important was 
the commitment was made at the start.
    The other thing in the case of Poland was clearly political 
leadership and commitment to the economic reform process were 
critical. The time frame was critical for holding, I think, 
Polish political commitment to the reform process during the 
period as well.
    I don't know that I can judge, you know, what part of that 
was the most critical element. Clearly there are other things 
in Poland, but the developed world made a very substantial 
effort for Poland.
    Mr. Obey. Mr. Balcerowicz, their Finance Minister, told me 
last year that had it not been for that action by the West, he 
did not think that their movement toward economic reform would 
have succeeded. I think he is right.
    Let me just ask two other questions. We have seen stories 
in the newspaper about the way in which employees of the World 
Bank and the IMF use the visa system for domestic workers from 
other countries so they can obtain people to work in their 
homes. Both institutions, I understand it, have specific 
guidelines on wage rates, insurance, and payment of taxes, but 
there is also little or no monitoring. There have been very 
many allegations of abuses.
    Mr. Secretary, what is your assessment of the problem in 
these institutions? Do you agree that a program ought to be 
initiated which informs domestic workers of their rights and 
which requires bank and fund employees to document contracts, 
Federal tax forms and truthful wages paid?
    Secretary Rubin. Mr. Obey, that is a set of problems that 
we saw for the first time in the press. We have been very much 
focused on it and we have said to these institutions they need 
to put in place programs which prevent this from happening in 
the future. Whether those are the specific components that the 
program should have, I don't know. But after listening to you, 
those sound like programs that would make sense.
    But whether that should be the content or not, I don't have 
a view. Bill?
    Mr. Schuerch. The State Department is working on this 
issue. It is the G-5 visa program that is in question here and 
there is a task force at the Justice Department on worker 
exploitation. So the institutions have been fully cooperative 
and have reacted strongly as well, and we are working toward 
strengthening their programs to make sure that this doesn't 
happen again.
    Mr. Obey. I just think that there is a time factor 
associated with this problem, and I would urge you to be very 
aggressive. I don't think the State Department, left to its own 
devices, will be aggressive enough.
    Secretary Rubin. I recall, talking with one of the senior 
people at the World Bank, who said this is much more of a 
problem for them than anyone else because it affects how they 
are perceived. He is onto the notion that this can adversely 
affect them.
    Mr. Obey. I don't want to get into the argument of callable 
capital. I agree with much of what Mr. Sabo just said. But let 
me ask you--you have been quite clear in your statements that 
this could have a deleterious effect on the confidence that 
investors have in those banks. I would like to ask you two 
questions. First of all, to the best of your knowledge, has the 
Congress ever engaged in any such action in the past?
    Secondly, I understand what the concerns are on the part of 
investors. But can you bring that home to us and tell us what 
negative impacts it can have on our own economy if something 
like this is read in the wrong way by people who care about 
such things in the world economy?
    Secretary Rubin. I will take the questions in the order you 
asked them. The only Congressional Action that I know of that 
is in the same area but it is not analogous to this was in 
1994, but in that instance capital, if I recollect correctly, 
had not yet been obligated. So that instance is not comparable 
to the rescission that has been proposed here.
    On the second question, as we have dealt with the world 
financial crisis and as we have dealt more generally with the 
question of promoting growth in developing countries which is 
very much in our economic interest, all of our work centers 
around the multilateral development banks and the IMF. I think 
it would be enormously against the interest of the United 
States to see these banks have their cost of money meaningfully 
increased, which then would reduce the resources which could be 
expended for the purposes they expend them.
    Secondly, I do think at this very sensitive time in the 
global financial markets, anything that looks like America 
pulling back, anything that looks like an American withdrawal 
from full leadership engagement in the problems of the global 
financial markets can adversely affect confidence.
    And in trying to work our way through this period, and 
there is a tremendous amount of work that needs to be done, 
anything that adversely affects confidence is against our 
economic interests. And anything that we do that looks like a 
withdrawal can have a meaningful effect on confidence.
    Mr. Obey. If that erosion of confidence occurs, what 
negative impacts does that have for us and our ability to 
export our products and preserve economic health in this 
country?
    Secretary Rubin. In 1997 just before the crisis, about 43 
percent of our exports were going to developing countries. 
Since then, as you know, coming from an agricultural State, 
exports in certain sectors have been very much adversely 
affected; and the Chairman, I think, had a lumber company 
affected by this, too, by the contractions in the economies in 
Asia and contractions elsewhere in the world in developing 
economies.
    So far the economy overall has withstood this remarkably 
well, but I do think that not only do we have the existing 
problem of sectorial effects, but this crisis has created a 
risk for our overall economy. I think as a consequence some 
industries, of course, have been affected by large increases in 
imports which come from the fact that other parts of the world 
are now experiencing either negative growth or less strong 
positive growth and so are importing less.
    Taken altogether, any erosion of confidence creates an 
additional risk for our economic well-being, growth for the 
jobs, financial living and the rest, and even if our economy is 
healthy, it certainly adversely affects some sectors.
    Mr. Obey. Thank you, Mr. Chairman.
    Mr. Callahan. Mr. Wolf.
    Mr. Wolf. Thank you. Mr. Secretary. I apologize, I was in 
another hearing.
    I wanted to ask you just one question. There was a New York 
Times article of February 11 that said, ``In a blistering 
evaluation of its own operations in Indonesia, the World Bank 
concludes that its officials turned a blind eye to corruption, 
growing repression, and a collapsing financial system in the 
final years of President Soeharto's 33-year rule,'' and then it 
goes on.
    What lessons did we learn, particularly with regard to 
China? We never hear any expression of concern from the 
administration or from the World Bank with regard to China. We 
have had reports--China is one of the largest borrowers from 
the World Bank--of slave labor camps actually getting loans 
because they are part of companies. Do you feel that the 
administration should say something? What did you learn from 
the Indonesia one?
    Secretary Rubin. That is a good question. Indonesia is one 
of the more interesting cases in this whole financial crisis. I 
think it was clear going into the Indonesia situation, Mr. 
Wolf, whether or not this program would be successful was going 
to be a function of what happened politically in Indonesia. And 
it was widely recognized that there was a real risk, given the 
various aspects of the Soeharto regime, that the politics might 
not work to put in place a really effective regime.
    I think as you come out of the Indonesian situation, it 
reinforces the realization that corruption is a major 
impediment to economic development. One of the leading figures 
in the international arena with respect to this question of 
developing countries was quoted the other day that, quote, 
``Corruption is probably the single largest impediment now to 
economic development in developing countries in many parts of 
the world,'' and I think that is right.
    One consequence of that experience is there is heightened 
focus, and I think rightly so, in the World Bank on corruption 
as a factor with respect to lending. And the President, when he 
announced our new debt relief initiative yesterday, has 
embedded in there corruption as one of the criteria that would 
be considered with respect to debt relief.
    That is Indonesia. It sort of reinforces the kinds of 
concerns that people have had all along about corruption and 
its effect on government.
    In China, I believe they will no longer be eligible for IDA 
loans after July of 1999, which is a few months from now. In 
terms of expressions by the administration, it is true that we 
have felt that a positive engagement is the policy that best 
serves the multitude of concerns we have with regard to China. 
It is also true that there have been many very vigorous 
comments by the President about national security and human 
rights and other matters with respect to China.
    Mr. Wolf. Conditions since the President returned have 
actually gotten worse both for the Buddhists in Tibet, the 
slave labor camps and for the other people. There have been 
some good words out of the administration, but I think it is 
more than just words; it is also deeds. Anyway, I just think it 
would be healthy. And some in the administration may feel a 
little funny after they leave, looking back on this chapter, 
that they were silent.
    I think when China falls, and I think it will in our time, 
as they go into records to see what was done and the forced 
abortion and the persecution, I think many people in 
government--and I may very well be wrong--are going to be 
feeling very guilty and very unclean for their lack of speaking 
out.
    I just think that sometimes you speak out and it helps and 
sometimes it doesn't, but at least you speak out. And today we 
are not really having any effective speaking out on the part of 
the administration that is credible in China with the 
dissidents or credible with regard to the dissidents in Tibet, 
if you want to call them that. Thank you very much.
    Secretary Rubin. We have used our voice and vote against 
credits extended in the multilateral development banks except 
for basic human needs, but it is a complex subject. I would 
agree with that.
    Mr. Callahan. Mr. Porter.
    Mr. Porter. Thank you, Mr. Chairman, and I appreciate your 
recognizing me. I have been across the hallway with my own 
hearing and, Mr. Secretary, I apologize for being late.
    Let me read you a statement and then you comment on it, if 
you will:
    President James Wolfensohn pledged at the 1997 Earth Summit 
II to calculate greenhouse gas emissions associated with World 
Bank projects. However, to date less than 10 percent of all 
World Bank projects are being calculated for impact on the 
climate. Since the 1992 Earth Summit, the World Bank has spent 
25 times more in climate changing fossil fuels than on 
renewables. Fossil fuel projects the World Bank has financed 
will, over the next 20 to 50 years, add carbon dioxide 
emissions to the Earth's atmosphere equivalent to 1.3 times the 
total amount emitted by all of the world's countries in 1995. 
While the U.N. continues to push the Kyoto Protocol to control 
greenhouse gas emissions, the World Bank appears to be doing 
nothing. In addition to financing dirty projects, the World 
Bank is helping open up some of the world's richest untapped 
oil and gas fields in regions ruled by dictators, while 
ignoring renewable energy opportunities that others are seeking 
out.
    What do you think about that statement?
    Secretary Rubin. Let me give you my response, and ask Mr. 
Schuerch if he would also comment.
    The World Bank is predominantly focused on poverty 
reduction, but there has been an enormous increase in 
environmental focus there as well. We have recently established 
an office under Bill Schuerch with respect to environmental 
review, and we now have 3 people in Treasury who specialize on 
environmental review of multilateral development banks and IMF 
programs.
    Mr. Knollenberg made the point that Kyoto has not been 
approved, but even without approval of Kyoto, that is a 300 
percent interest in environemntalists. We had zero. We are very 
focused on global climate change. In terms of the World Bank 
and its focus on global climate change, let me ask Mr. Schuerch 
to comment.
    Mr. Schuerch. Let me say in being focused on poverty 
reduction, the World Bank has a substantial conflict, if you 
will, in recognizing where you strike the balance between 
environmental issues and poverty reduction. This institution 
was created, focused on poverty reduction particularly in the 
poorest countries. But, when you come to energy projects, you 
get into a whole range of questions. The bank does lending in 
energy projects, but it does it in a way that is aimed at 
influencing the activities so they become lesser emitters of 
greenhouse gases.
    Now, it is a marginal benefit, if you will, if you put up a 
plant that emits gases less than otherwise would have happened, 
but it is a gain. But all of the emissions out of that plant 
are scored negatively as greenhouse gas emissions created by a 
World Bank loan.
    There is a balance here. The bank is dedicated to energy 
efficiency, and we have a set of policies that we are pushing 
related to new technologies and improved tracking. But the 
gross measure of greenhouse gas emissions, I think will 
continue to show a net increase in greenhouse gas emissions 
overall, albeit the Bank would argue significantly less than 
otherwise would be occurring.
    Mr. Porter. Do you think that the United States has a 
responsibility through its representative to push the 
environmental side of their responsibilities as well as the 
poverty fighting side?
    Secretary Rubin. A, I do; and, B, I think we do. And as I 
said a moment ago, to more effectively do that, we have now 
created an office in the part of Treasury that deals with 
development banks, so we can more effectively evaluate that 
effort. But in answer to your question, yes.
    Mr. Porter. Bill, it is good to see you. Bill was a very 
valued member of the staff for this subcommittee, and it is 
good to see you in this position.
    Mr. Secretary, as I understand it, you are proposing to pay 
down $168.4 million of our arrearage to the multilateral 
development banks, and the arrearage is about $1.39 billion. 
Are those the right figures?
    Secretary Rubin. No. The arrearage right now is $310 
million--it was $900 million and it is now $310. If we pay this 
down with the amount requested for arranges in the FY 2000 
Budget, which is $168.38, it will leave us with a balance of 
$141.90 in arrearages.
    Mr. Porter. This includes U.N. money?
    Secretary Rubin. I am excluding U.N. money.
    Mr. Porter. What if you include U.N. money?
    Secretary Rubin. That is State Department. I don't know the 
answer to that, Mr. Porter. But with respect to multilateral 
development banks----
    Mr. Porter. We would be able to make about 50 percent of 
the way to getting this thing paid up?
    Secretary Rubin. A little over 50 percent.
    Mr. Porter. That is the best we can do?
    Secretary Rubin. We would be happy to take more. We 
obviously would like to get the whole thing wrapped up. The 
subcommittee has done a very good job. We had a 3-year program. 
I think we were $900 million in arrears at our high point, not 
counting the IDA 11 problem.
    Mr. Porter. What are the arrearages that the United States 
run, say, to the rest of the world and how does that affect our 
credibility in these institutions?
    Secretary Rubin. I think when our arrearages were 
substantially higher, we were rightly concerned about the 
possibility that our influence would be substantially 
diminished.
    I think the program that this subcommittee has worked with 
us on has really preserved this influence, and I think if we 
get the appropriation that we have requested this year leaving 
a balance of $141 million, we will have done what you have 
suggested, which is preserve our ability to affect the overall 
direction of these institutions.
    Mr. Callahan. We are going to have to start the second 
round.
    Mr. Porter. How does it feel to be Secretary of Treasury 
with the strongest expanding economy in American history?
    Secretary Rubin. Well, it has pluses and minus, but on 
balance it is plus.
    Mr. Callahan. It probably feels the same way that it feels 
to be a Member of Congress who caused this economic expansion.
    Secretary Rubin. That was an unfortunate title for that 
article.
    Mr. Callahan. I am going to ask that you promptly get the 
responses back to questions because some of them will involve 
the supplemental, so get them back as quickly as you can.
    We had a lot of discussion this morning about the African 
Development Bank and the HIPC fund. Isn't part of the HIPC 
money proposed to assist the African Development Bank?
    Secretary Rubin. Yes.
    Mr. Callahan. Why didn't you ask for all of it in HIPC?
    Secretary Rubin. There are two different things. One is the 
replenishment--there is a small amount of money for the African 
Development Bank and a larger amount for the African 
Development Fund.
    There is a separate question, which is resources for debt 
relief in the African Development group, if you will, and that 
money goes into a trust fund at the World Bank which will then 
provide the money to the African Development Fund. But the 
ultimate benefit--althouth I see your point--of HIPC Trust Fund 
support for the African Development group will accrue to the 
countries.
    Mr. Callahan. What countries? That is the next question. 
What countries will be eligible for loans?
    Secretary Rubin. Uganda would be an example. You mean for 
debt relief? Uganda, Mozambique? You are talking about the HIPC 
money?
    Mr. Callahan. No, the African Development Bank money. If we 
give you the $5.1 million--which African countries could 
benefit from it?
    Secretary Rubin. Do you have that list? I think there are 3 
different pieces of money. One is the $5.1 million for the Bank 
which would be used for ``hard money'' loans. So that would 
have to be used for countries with relatively good credit. 
Those would not be HIPC-eligible countries.
    Mr. Callahan. Other than Morocco, Egypt and Botswana, who 
would benefit? South Africa is not interested.
    Secretary Rubin. Bill has a list of the hard dollar 
borrowers. Botswana, Swaziland, Namibia. You are talking about 
the $5.1 million. Seychelles and Gabon.
    But none of those are countries which would be involved in 
the HIPC debt relief program. So those are two unrelated 
subjects.
    Mr. Callahan. On the selling of gold, there were some who 
argued last year that we should have done that in order to make 
certain that the necessary monies were there for the 
International Monetary Fund to provide assistance to the Far 
East. The administration argued against that. Now you are 
coming back and saying we ought to sell the gold.
    Secretary Rubin. I think----
    Mr. Callahan. Or swap it for interest-bearing bonds.
    Secretary Rubin. There were some who felt that the gold 
should be sold and those resources should be used to provide 
loans to countries that were troubled. That would have 
diminished the asset base of the IMF and its creditworthiness.
    Mr. Callahan. The asset base of the IMF is not diminished 
by advancing money to a country that is supposed to pay it 
back. That becomes an asset.
    Secretary Rubin. Well, yes, it does. And as you know, the 
IMF has a very good record in the payment of its loans. But 
loans are a lower-quality asset than gold. A loan to Thailand 
in trouble is a lower-quality asset.
    Mr. Callahan. What do these experts in the world market say 
about the IMF selling this solid asset of gold in exchange for 
some bonds? Do they say it is an even swap?
    Secretary Rubin. I think if you sell gold and are going to 
buy Treasury bills that are backed by the full faith and credit 
of the United States Government----
    Mr. Callahan. The full faith and credit of the United 
States Government, you just said that it was not that good in 
the foreign market.
    Secretary Rubin. No, in terms of backing our debt, 
particularly since we continued to pay our debts through the 
1995 debt limit crisis, I think we have preserved the integrity 
of the United States Government with respect to Treasury bills 
and those kinds of obligations. I think in relation to our 
support for international institutions there is somewhat more 
concern, perhaps. My view is if you took gold and swapped it 
with Treasury bills, there is no market risk because they are 
short term. I don't think that would affect the perceived 
creditworthiness of the IMF.
    Mr. Callahan. Is the gold there at the cost of the gold or 
does it fluctuate? Does the asset value fluctuate with the cost 
of the gold?
    Mr. Schuerch. $42.20.
    Mr. Callahan. So the gold is carried at $42 an ounce, and 
it is selling for $285-300 an ounce now. At one time it was 
$800 an ounce.
    Secretary Rubin. It has come down some.
    Mr. Callahan. It would appear to me that an investment 
banker probably would suggest to his client that someday he 
sell an asset that went from $32 and put it in Treasury bonds. 
Shouldn't that have been done long ago?
    Secretary Rubin. My view, just as a personal view, I think 
they would be wise to take a certain amount of their gold and 
put it into interest-bearing securities.
    Now, the negative of that approach and the reason some 
people opposed it, as I say, is that gold has a certain 
symbolic value or intangible value with respect to how 
creditors perceive the IMF, and you might be sacrificing some 
of that intangible value.
    My guess is that you could do it up to a point. Beyond a 
point you might affect perceptions; I don't know.
    Mr. Callahan. You mentioned earlier that you were concerned 
about the trend of us going into the callable capital account 
and that this would be an indication that there is an 
availability of money that we could use to rescind in some 
future time?
    Secretary Rubin. Correct.
    Mr. Callahan. What if the International Monetary Fund comes 
back, and they are not going to come back for additional 
capital, why wouldn't the Congress say, Sell some of your gold 
at a profit from $32 an ounce to $285 an ounce and make up your 
capital needs from that asset?
    Secretary Rubin. In my view, Mr. Chairman, and a few years 
from now somebody else will be warning about that, but when we 
look at the IMF----
    Mr. Callahan. Do you mean that I might not be here?
    Secretary Rubin. No, you will be here forever, and somewhat 
longer. But when we look at the IMF and make judgments about 
whether their obligations to us are good, we know where gold is 
traded. We value it at market.
    This is not unlike a lot of institutions that carry things 
at cost, but when creditors look at assets they mark up the 
balance sheets for the difference between cost and market. And 
I think the problem with what you suggested is that though some 
may suggest it, it would in fact be diminishing the actual 
creditworthiness of the institution.
    Mr. Callahan. We have talked about debt forgiveness and I 
talked earlier about my concerns: Why are we going to pay off 
their debts so they can just borrow more money. Japan, I 
understand, puts contingencies on debt forgiveness to 
countries, puts constraints on the country against borrowing, 
and I just wonder why we don't. Nancy touched on it. If we are 
going to forgive debts and enable countries to borrow new 
money, why don't we put some constraints on what they can 
borrow the money for?
    Secretary Rubin. Well, what we do with our debt relief, I 
think is along the lines that you are talking about. I am not 
sure, Mr. Chairman, if I fully understand your point correctly 
but I think I agree with it. What we don't want to do is 
provide debt relief for a country that is not committed to 
reform, because then we have the problem of the debt relief--
the resources--being wasted.
    Mr. Callahan. That is my point.
    Secretary Rubin. We agree with that.
    Mr. Callahan. If we are just going to position the 
countries to go and borrow more money to spend in such a manner 
that the debt originally was, the money they spent for the most 
part was wasted or put in some foreign bank by some corrupt 
official or either used for a project that, because of 
kickbacks and payoffs, you had low-quality material going to 
bridges and roads that can't be used today. So we are going to 
forgive the sins of the past and wipe your slate clean and we 
are going to permit you to borrow more money because you don't 
owe money? What is the protection against that?
    Secretary Rubin. The concern that you have expressed is one 
that we very much share. Number one, debt relief under our 
existing programs and under the President's proposal would only 
go to countries that are committed to strong reform programs. 
Your correct question is, once they say that they are 
committed, how do we know that they are going to do what they 
say?
    The way that the HIPC program works is the country makes a 
commitment and, at least as currently structured, it has to 
have a 6-year track record of reform before a closing and 
reduction in the stock of debt. Our view is that they should 
get interim relief during that period, but if they don't 
continue to perform, that interim relief stops and their stock 
of debt is not reduced.
    Secondly, I don't think that there should be total debt 
reduction because I think it is very dangerous to have 
borrowers feel they can borrow and not have to pay back 
anything. So I think we keep a certain discipline by saying we 
should have very substantial debt reduction in the case of 
these highly indebted countries, but not total debt reduction. 
So I think those are the two ways that we try to address this 
problem.
    Mr. Callahan. I am going to ask one more question and then 
submit the rest of them and move to the second round.
    There was a lot of discussion this morning about the 
callable capital, and I know that Mr. Obey is concerned about 
it. The President is also concerned about the $900-plus million 
for aid to Central America, as many of us are. And we want to 
facilitate the President. Are you going to recommend to the 
President that he veto this bill if we leave the callable 
capital in?
    Secretary Rubin. He has sent a letter saying that if the 
bill has four offsets cited in the letter, he would veto the 
bill. That is his letter. I believe if the callable capital is 
in the offset, he should veto the bill.
    Mr. Callahan. If we do not do that, then we are not going 
to be able to get the money for the disaster aid in a 
reasonable amount of time?
    Secretary Rubin. I think the question then will be, Mr. 
Callahan--my own view is that I think the disaster aid should 
be done as emergency legislation--but if we are going to have 
to offset it, I think the question is how does this get offset? 
And that is something that the administration and the Congress 
have to work on. But if you ask me would I recommend a veto if 
the callable capital is in the offsets, yes.
    Mr. Callahan. The emergency appropriation request also 
comes with an urgency that they need the money right away to 
begin the reconstruction and to help the people who are in such 
dire need. If indeed the President is going to veto this thing 
next week----
    Secretary Rubin. I didn't say that he would veto it. We 
think that the supplemental should be done on an emergency 
basis.
    Mr. Callahan. What you are doing is saying that you are 
more concerned about what actuaries in these foreign countries 
that keep the tabs on the assets and liabilities of these 
foreign banks, that indeed we are more concerned with what they 
are going to say or think, rather than whether or not we are 
going to get assistance to these people who need the assistance 
so badly in Central America?
    Secretary Rubin. It is our view, Mr. Chairman, that we can 
in the final analysis work with Congress, whether in the 
conference context or some other context--although we don't 
believe that the emergency assistance should have to be 
offset--to come up with appropriate offsets.
    Mr. Callahan. I would agree that the budget resolution 
indicated there was no need for a budget offset, but in order 
to pass any bill through the Congress, you have to have a 
majority of the votes, and the leadership on our side has 
instructed us to find offsets. We have come up with this 
offset. Indeed if the administration feels is not the right 
offset, well then where out of Treasury do you want me to take 
this money or where out of the State Department do you want me 
to take this money?
    Secretary Rubin. I am not sure, Mr. Chairman. Let me defer 
that question for the moment, because I am not sure that our 
view quite relates to the framing that you just presented. We 
will work with the Congress, we being the administration, to 
find offsets.
    Mr. Callahan. There is a problem here. We do not have 
sufficient support within our conference, as far as I know, to 
pass the bill. Maybe we could do it if all Democrats voted yes, 
but with the callable capital in there--we don't have a 
sufficient number of votes of a majority of our conference, 
because they want offsets also for the military portion to come 
from some area other than the military.
    So we have problems with these offsets, and we are faced 
with this reality, and we can argue about it for 5 or 6 months, 
but in the meantime we are not going to have the money to 
provide assistance to these people in Central America?
    Secretary Rubin. Since we feel very strongly about the 
assistance, I guess it would be our hope that it could be 
worked through far more expeditiously without having to use 
offsets, at least offsets that we think create the kinds of 
problems that these offsets create.
    Mr. Callahan. I don't think you are going to see a 
supplemental bill come through this Congress or survive 
conference that is not going to have offsets.
    Secretary Rubin. I agree with that based on everything that 
I have heard. The question is, given that we are going to have 
to have offsets, what are the offsets that create the least 
damage?
    Mr. Callahan. We figured this offset created the least 
damage.
    Secretary Rubin. We may have some other ideas.
    Mr. Callahan. Ms. Pelosi.
    Ms. Pelosi. Thank you very much, Mr. Chairman. I have a 
number of questions and I am going to try to boil them down.
    The offsets, I think that the Appropriations Committee is 
making policy by requiring these offsets because it is saying 
that the issue of an emergency is moot. The idea that an 
emergency does not need to be offset is in the budget 
agreement. If this does not qualify as an emergency with 
thousands of people killed, millions homeless, economies wiped 
out, people impoverished with no prospects, then there is no 
emergency. This is the worst natural disaster in our hemisphere 
in anyone's memory.
    So I think that a step is being taken here that should 
render moot any further discussion of not offsetting anything. 
It amazes me that the defense spending in the bill is not 
offset. That is an emergency, and our service people performed 
beautifully down there. We are so proud of them and their 
contribution should not be offset, nor should the contributions 
of any of the other U.S. agencies or the alleviation.
    Secretary Rubin. I totally agree with you. My discussion 
with the Chairman had to do with whether we have to have 
offsets. It is our view that we shouldn't have offsets. What 
the Chairman said, is that there is no indication that it can 
be done without offsets.
    Ms. Pelosi. I understand that. I was addressing my 
Chairman's comments.
    Secondly, on the question of debt relief, we are all 
talking about corruption and what leaders are stowing money in 
foreign banks. I think we have to take ourself to a place 
called alleviation of poverty and grow from there as to what 
the best policy would be--to alleviate poverty by some 
assistance, by stimulating the economy to take advantage of 
market opportunities, by having economic reforms. But every 
time we come from above, we end up with debt relief related to 
structural reforms that exacerbate the poverty in these 
countries, and the people at the low end pay the price, whether 
it is IMF reform, debt forgiveness, all along the way.
    So I hope that we will have provisos about how the money is 
spent, but that we do it in furtherance of the goal of 
alleviating poverty. If you want to talk about Chile or any 
other success stories, we always end up with people at the low 
end of the economic scale paying a big part of that price.
    Secretary Rubin. We agree with your focus on poverty 
remediation.
    Ms. Pelosi. On environment, I am proud of the Pelosi 
amendment and I am pleased that you have 3 people at the 
Treasury Department, and I am glad that Bill Schuerch is 
overseeing the multilateral development banks, et cetera.
    I have a question about the IFC. The Fiscal year 1998 
Foreign Ops bill extended the coverage of the Pelosi amendment 
to the IFC. Is the IFC complying, and if not why not, and what 
is the Treasury doing?
    Mr. Schuerch. The brief answer is that we do not yet have 
IFC in full compliance. IFC has many of its projects within the 
120 days, but they do not have a policy that says 120 days. 
They have a lesser policy of 60 days. We usually have our best 
opportunity to achieve process through leverage, quite 
honestly, in negotiations on capital increases, and the IFC has 
been in a situation where we have not had that opportunity.
    We have been using our voice and vote repeatedly in the IFC 
in every instance. I don't think that we have missed a one when 
the project has not met the 120-day rule. There also is an 
issue, of course, related to projects that are not the most 
environmentally sensitive, and timing on those as well.
    We continue to work on the IFC and also at the Multilateral 
Investment Guarantee Agency. But as yet the effort is not fully 
successful. I would have to be honest and tell you no other 
government is supporting the United States in this effort.
    Ms. Pelosi. That is what is known as leadership. Just 
because other countries are not concerned about the environment 
and economic investments and support for those projects doesn't 
mean that the U.S. should not be taking the lead. Indeed, we 
should be using our own leverage to protect the environment, 
because we are not doing any favors to these countries by 
helping them degrade their environments when there is a price 
for us all to pay. And I know that you are committed to that. I 
am just saying that falls on deaf ears to me. We have to exert 
more leadership.
    I just want to make a comment on the GEF because I think it 
is a very important initiative, and with or without Kyoto--and 
I wish I was here when Mr. Knollenberg was here when he was 
tying it to Kyoto. The GEF's organized purpose is to mitigate 
specific environmental problems in specific countries. GEF 
cleans water, purifies air, and creates cleaner resources for 
energy. Whether or not the Kyoto meeting ever took place, 
whether or not that treaty is ever ratified, GEF has a purpose 
that must be funded, and I appreciate your commitment to that.
    Can you tell me, Mr. Secretary, about the World Bank's 
Inspection Panel? Many environmental and human rights NGOs are 
concerned that the changes being recommended by a working group 
would seriously undermine the panel's effectiveness and 
credibility. Senator Leahy, Congressman Barney Frank, and I 
just sent a letter to President Wolfensohn expressing concerns 
about some of these changes. What is the Treasury's view on the 
panel and the proposed changes?
    Secretary Rubin. Let me ask Mr. Schuerch to answer.
    Mr. Schuerch. We are very much aware of the working group's 
proposal. We worked very hard in the IDA 12 negotiations and 
there is a clear statement of support for the inspection panel 
that has passed the board of the Bank and is up for a vote by 
each of the Governors now. So we will have a clear statement.
    Nevertheless, we still have the activities of the working 
group. It is a controversial set of proposals, and the 
inspection panel itself has spoken out strongly against the 
proposals. We have worked internally. Our USED is working very 
hard on the subject matter. We have an agreement that is now 
out in public for review and comment which had not been the 
original arrangement.
    And once those comments are back in, the board will have 
further meetings. So we are actively pursuing making the 
working group's product--or at least the action that later 
passes the board vis-a-vis the inspection panel--one that will 
at least leave it at its current position, if not strengthen it 
further.
    Ms. Pelosi. Thank you, Mr. Chairman. Mr. Chairman, I want 
to submit a question about the size of the military budgets, 
which concern should be taken into account when multilateral 
development banks make lending decisions, and another question 
regarding the debt relief for tropical rain forests.
    I want to thank our witnesses for their leadership and 
testimony today and acknowledge that Mike Marek was here 
earlier. He is also an alumnus, and we are so proud of him, as 
we are of Secretary Schuerch and of you, Mr. Secretary. Thank 
you.
    Mr. Callahan. We are going to recognize Mr. Jackson and Mr. 
Porter for 5 minutes and then we are going to adjourn this 
meeting and go to the St. Patrick's Day luncheon.
    Mr. Jackson. Thank you, Mr. Chairman. I want to ask all of 
my questions, submit the remaining balance for the record and 
then leave the Secretary the time to respond.
    Can the Secretary justify asking Nelson Mandela's 
government to pay off debts contracted by the apartheid era 
government, funds that were used to oppress the majority 
population for decades?
    Would the Secretary comment on the logic and morality of 
forcing the Democratic Republic of the Congo, formerly Zaire, 
to pay off the debts accumulated by Mobutu Sese Seko, our guy 
during the Cold War, given that the 1982 report, commissioned 
by the IMF itself, found that its loans were going directly to 
the dictator's private accounts?
    Number 3, is there no way for the U.S. to apply the same 
logic to its recommendation on multilateral debt that it does 
on bilateral debt; that is, press for full cancellation of all 
debt for the most impoverished countries, at least for the 
concessional portion, as in its own bilateral proposal?
    Secretary Rubin. What is the third one?
    Mr. Jackson. I am going in reverse order on the document I 
provided to you.
    Number 4 from the bottom: Is the secretary aware that 
Mozambique, which received the largest reduction under the HIPC 
so far, will see its annual debt payments dip from $111 million 
to $100 million and that the Parliament and some of the Cabinet 
were sent into an uproar upon learning that to get even that 
amount of debt relief, they would have to quintuple user fees 
at health clinics? By the way, they have a per capita income of 
about $500 per year.
    I am also interested in whether the Secretary is aware that 
Claire Short, the Minister of Development in the United 
Kingdom, recently disclosed that because of the fluctuations in 
the price of coffee, that Uganda, which was the first 
beneficiary of HIPC, is now back where it started with an 
unusual and unofficially unsustainable debt? Does this speak 
well for HIPC programs?
    Lastly, what will the source of the apparent grants to HIPC 
countries be? Apparently between the decision point and the 
completion point--and really to follow up on a question and 
concern, I guess, raised by our Chairman--since our country has 
had some role in the Cold War in choosing in the global chess 
game leaders to control and run various countries, particularly 
in Africa, and Nigeria, the apartheid government, since we had 
some role in making sure that these countries got these loans 
during the Cold War, should we take a leadership role in 
eliminating them without conditions?
    Secretary Rubin. Let me try to give you a general answer 
because I think debt relief gets into some very complicated 
issues. I have been in South Africa and I met with the leaders, 
and no one ever raised with me the question of debt relief with 
respect to the apartheid-era debt.
    I would guess, and I don't know, I would guess that it 
might well be something that they would be very hesitant to do 
because--and I said this in my opening remarks--it is a much 
more complex subject once you get into it than it is at first 
blush.
    If a country is thought not to have a credit culture, a 
culture in which people are basically committed to paying back 
debts, I don't think that they are going to find that they can 
get access to private sector capital from the international 
financial markets.
    Mr. Jackson. Mr. Secretary, certainly history plays a role 
in this. For example, the 1982 report on our guy in the 
Democratic Republic of the Congo, Zaire, Mobutu Sese Seko, he 
was our friend, he was our guy, our country's friend. It says 
that the money was lent through the International Monetary Fund 
and through other international lending organizations to the 
country of Zaire to take care of basic human needs, 
infrastructure, roads and projects. But our guy--the money 
never ended up with the people. It ended up in his private 
accounts. Certainly we should not strap the people of Zaire 
with the debt burden associated with him.
    Secretary Rubin. That is why the President suggested that 
in countries that have effective reform programs and have very 
high debt levels and very high poverty levels, there should be 
100 percent ODA concessional debt and 90 percent other 
bilateral debt.
    On the other hand, I don't think it would be--this is my 
view, and you can argue this both ways, I suppose--I don't 
think that it would be in their self-interest to get full 100 
percent debt relief if the other comment that I made is 
correct.
    Mr. Jackson. Mr. Secretary, aren't we using precisely--
using your own logic, aren't we using the debt accumulated by 
Mobutu Sese Seko that ended up in private accounts under the 
IMF's own internal analysis of where the money actually went, 
aren't we using that to advance a structural adjustment reform 
for the people of Zaire who are not responsible for the 
dictator's accumulation of that wealth?
    Secretary Rubin. Well, I am not quite sure I would frame 
the question that way. We are in favor of very substantial debt 
relief in this situation. On the other hand, we are not in 
favor of taking debt relief beyond the point at which it would 
cripple the countries. It doesn't matter what our perceptions 
are. But it would cripple the country's ability to get capital 
in the international financial markets.
    Mr. Callahan. Mr. Porter?
    Mr. Porter. Thank you, Mr. Chairman. Mr. Secretary, the 
United States has successfully done some debt for nature swaps 
and----
    Secretary Rubin. In Latin America, principally, I think.
    Mr. Porter. The legislation was renewed and signed by the 
President. The original legislation was mine, and Congressman 
Portman was the lead on renewing and refining it. Fifty million 
dollars is requested by the Administration for debt for nature 
swaps for fiscal year 2000.
    Aren't there opportunities with a lot of the countries that 
we are now talking about giving debt relief to, to make that 
debt relief a positive for their countries and preserve some of 
the nature that otherwise might be lost?
    Secretary Rubin. Well, the debt relief will be a positive 
in any event because one of two things is going to happen. 
Either these countries will pay their debts, and then they 
won't have those resources to use, or they won't pay the debts 
in which case they run the risk of becoming pariahs in the 
international capital markets and of not being able to get 
private sector capital.
    I think the question that it raises--and you are referring 
to a particular piece of legislation and it is a very important 
piece of legislation--if a country has additional resources 
because of debt relief, how should those resources be 
allocated?
    Your legislation requires debt for nature swaps, but there 
are also other social and education needs that these countries 
have, and it is a question of where you think that this money 
can be best used.
    Mr. Porter. Under the legislation we certainly have some 
leverage to encourage environmental uses and preservation of 
natural areas and that should be factored into our judgment.
    Secretary Rubin. Under your legislation, it has to be used 
for that purpose, doesn't it?
    Mr. Porter. Yes. Thank you, Mr. Chairman and Mr. Secretary.
    Mr. Callahan. Mr. Rubin, Irish lore has it if you want to 
have a successful, fruitful year, that on St. Patrick's Day you 
must spend time with some honest and noble people, and I have 
two more stops to make.
    Secretary Rubin. Then you may satisfy that aspiration, Mr. 
Chairman. We apologize for wasting so much of your time with 
respect to that objective.
    Mr. Callahan. Thank you for your testimony.
    [Questions and answers for the record follow:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                          Thursday, March 11, 1999.

        FISCAL YEAR 2000 BUDGET REQUEST FOR SECURITY ASSISTANCE

                               WITNESSES

JOHN D. HOLUM, ACTING UNDER SECRETARY OF STATE FOR ARMS CONTROL AND 
    INTERNATIONAL SECURITY AFFAIRS
JAMES BODNER, PRINCIPAL DEPUTY UNDER SECRETARY OF DEFENSE FOR POLICY

                 Chairman Callahan's Opening Statement

    Mr. Callahan. Thank you all for coming. Today we are having 
this hearing on the international security assistance portion 
of the President's budget for foreign operations. The funding 
requested for the international security accounts including the 
Economic Support Fund, IMET, the foreign military financing 
program, voluntary peacekeeping operations and the 
nonproliferation account exceeds $6.2 billion, an increase of 
$120 million over the fiscal year level 1999.
    Much of this funding is committed, as history always 
reflects, to the Middle East. These numbers do not include the 
fiscal year 2000 impacts of the Wye River supplemental, which 
would add $500 million for economic support, and FMF for 
Israel, Jordan, and the West Bank and Gaza, and with these 
funds the total increase of $620 million, or over 10 percent.
    Of course, this budget request is used to support policy, 
and therefore we will be focusing today on the status of the 
administration's security and foreign policy throughout the 
world.
    We have a number of disturbing trends, at least to me. 
First we continue to make North Korea one of the largest 
recipients of our assistance in East Asia. That country is 
developing missiles that threaten not only our allies, but 
potentially, we understand, possibly the mainland of the United 
States.
    Second, we continue to provide substantial assistance for 
both Russia, and the administration is asking for a huge 
increase in assistance for that country, yet we continue to 
read press reports that Russia is supplying arms and nuclear 
and missile technology assistance to Iran and other enemies of 
our friends in the Middle East.
    Third, we have very disturbing reports about spying by 
China at one of our most sensitive nuclear facilities in New 
Mexico, and further reports that the administration did not act 
promptly to either inform Congress about these activities or to 
impose additional security measures.
    At the same time, the administration is asking for an 
additional $20 million to implement the comprehensive nuclear 
test ban treaty, a treaty that has yet to be ratified by the 
Senate.
    Fourth, we continue to engage in air strikes against 
targets in Iraq due to the failure of international efforts to 
monitor the Iraq Defense Act activities. It is ironic that we 
bomb Iraq for its failure to ban weapons of mass destruction, 
but we provide assistance to North Korea when they are accused 
of doing the same thing.
    Fifth, even in Africa we see renewed warfare in Ethiopia 
and Eritrea, the collapse of the U.N. peacekeeping operations 
in Angola, and continuing civil war in the Democratic Republic 
of the Congo.
    Sixth, we see little progress in Haiti, which has not had a 
government now for almost 2 years.
    Finally, we have a prospect of another long-term commitment 
to U.S. troops and resources in the Balkans, this time for 
Kosovo. At the same time, the Dayton Peace Accord in Bosnia is 
threatened due to the removal of the President of the Bosnian 
Serb entity, and for the first time a U.S. soldier was forced 
to kill a civilian to defend himself from harm.
    We have a military that is increasingly stretched thin in 
its ability to respond to all of these initiatives and still 
retain its readiness and a core group of veteran professionals. 
The U.S. military may face the worst personnel crisis since the 
end of the Vietnam War. The proliferation of missions in far-
flung regions of the world is undermining our ability to 
recruit and retain the most important instruments of the U.S. 
international security, the men and women of our Armed Forces. 
Our resources are not endless, and the ability of our troops to 
respond to every possible contingency in the world is not 
without limits.
    Our witnesses today are John Holum, the Acting Under 
Secretary of State for Arms Control and International Security 
Affairs, and James Bodner, Principal Deputy Under Secretary of 
Defense for Policy, and we welcome you all here today. Both of 
your statements will be included in their entirety in the 
record; therefore, I encourage to you summarize your statements 
in order to allow Members time to ask questions.
    Mr. Callahan. Ms. Pelosi.

                     Ms. Pelosi's Opening Statement

    Ms. Pelosi. Thank you very much, Mr. Chairman. This is a 
very important hearing today. The subcommittee will hear 
testimony on the fiscal year 2000 request for the security 
assistance related programs in the Foreign Operations bill. I 
want to join you in welcoming our witnesses, Secretary John 
Holum, the Acting Secretary of State for Arms Control and 
International Security Affairs, and Mr. James Bodner, the 
Principal Deputy Under Secretary of Defense for Policy.
    I intend to discuss a range of topics today, including the 
status of our military sales programs, progress on demining, 
the implementation of the Comprehensive Test Ban Treaty, our 
policy towards North Korea, the status of relations between 
Greece and Turkey, and IMET for Pakistan as well as other 
issues. The Chairman laid out a litany of concerns in his 
opening remarks, and clearly there are so many issues it is 
hard to see how we can cover them all in one hearing, but I 
will try to cover my issues in the allotted time.
    Mr. Chairman, last year as a result of growing concern 
about the rapidly expanding foreign military training programs 
conducted throughout the world by our Defense Department, a 
provision was included in the Foreign Operations bill that 
required a report on the scope of U.S.-sponsored military 
training throughout the world.
    The report, which was only recently submitted, indicates 
that $1 billion has been spent on foreign military training in 
the past 2 years on over 51,000 different activities. Clearly 
the scope and range of U.S. foreign military training has 
ballooned significantly well beyond the $50 million IMET 
program funded in the Foreign Operations Bill.
    The law requires that a foreign policy justification be 
submitted for such training and, specifically, that information 
on the JCET program, the Joint Combined Exercise and Training 
program, be included in the report. The foreign policy 
justification submitted with the report consists of one four-
sentence paragraph, and all the information on the JCET program 
was submitted in classified form.
    The report shows that there are numerous instances where 
decisions are made to deploy U.S. forces in training capacity 
into foreign countries without any congressional consultation 
or involvement.
    The Foreign Operations subcommittee is supposed to have 
jurisdiction over foreign military training. The DOD budget is 
supposed to fund training which primarily benefits our military 
forces. Primarily. The scope and extent of foreign military 
training funded by the DOD shown in this report demonstrates 
that this distinction has been purposely evaded in order to 
avoid congressional oversight.
    Congress is not adequately informed of the vast majority of 
these training activities and deployments, many of which have 
foreign policy implications. Unfortunately, the DOD has chosen 
to submit a report that is narrowly crafted and is unresponsive 
to our concerns.
    The apparent recent decision by the administration to 
deploy U.S. special forces to train an 800-man counternarcotics 
battalion in the Colombian Army is a recent blaring example of 
this evasion. Because of numerous instances of human rights 
violations and the Colombian police's mistrust of the Colombian 
Army--making a distinction here, Mr. Chairman, between the 
police and the army--U.S. policy and the debate in Congress has 
centered around what resources should be provided to the 
Colombian National Police for counternarcotics programs.
    The administration has decided to initiate this special 
forces army training within the last 2 months. Congress was 
never informed of this decision, despite the obvious interest 
and its controversial nature. I am forced to conclude that the 
lack of consultation was purposeful, or, even worse, that only 
selected individuals in Congress were informed despite the 
direct role of this subcommittee.
    Another recent example is the case of Indonesia where only 
after press stories occurred was Congress made aware of 
extensive training programs with the Indonesian Army and even 
training of the Indonesian intelligence force. This is on the 
heels of action taken by the DOD in the early 1990s to allow 
Indonesia to purchase IMET training with their own funds to get 
around a congressionally placed ban on IMET. The requirement 
for the training report was a modest attempt to gather 
information about all DOD training activities, and it is my 
hope that a separate hearing will be scheduled so that we can 
ask in-depth questions about all issues raised by it.
    My intention today would be to explore with our witnesses 
why this report was so narrowly crafted and how this kind of 
behind-the-scenes decisionmaking can be justified in instances 
that are so controversial and of such obvious interest to this 
subcommittee.
    The House may be spending the rest of the day debating the 
deployment of U.S. troops to Kosovo at the insistence of our 
Speaker. He has scheduled this resolution in order to respond 
to concerns within his caucus about the commitment of U.S. 
troops. The situation in Colombia is only different from Kosovo 
in scale. It is no different in terms of the controversy it 
generates and the potential danger it poses. In fact, it may be 
more dangerous sending U.S. troops to Colombia because of the 
absence of a peace agreement. The recent killing of three 
Americans in Colombia should demonstrate in stark terms the 
perils of that country.
    Finally I want to note my continued concern about our IMET 
program in Pakistan. I have consulted extensively with the 
State Department on this and agreed not to oppose a 1-year IMET 
program for Pakistan. Decisions about the future inclusion of 
this authority for next year will depend on Pakistani 
performance on various nonproliferation concerns. I intend to 
pursue these issues today to take advantage of the presence of 
high-level officials from both State and DOD. I look forward to 
the opportunity to discuss further the training issue in a 
military training hearing. I look forward to the testimony of 
our witnesses today.
    Thank you, Mr. Chairman.
    Mr. Callahan. Secretary Holum, we have received your 22-
page Statement and had the chance to at least begin to scan it, 
and certainly will take it seriously and read it in its 
entirety at some time during this process, but we would ask now 
that you summarize your presentation.

                     Mr. Holum's Opening Statement

    Mr. Holum. I will be happy to do that, Mr. Chairman.
    Members of the committee it is a pleasure to be with you 
this morning along with Principal Deputy Under Secretary Jim 
Bodner to testify in support of the administration's fiscal 
year 2000 security budget request.
    I know you have many issues that you want to discuss in the 
next few hours, and you have given us a good many.
    Mr. Callahan. We are not going to get too much into the 
budget request. This is a policy hearing. You wouldn't like to 
be in that meeting anyway.
    Mr. Holum. A year ago Secretary Albright, Under Secretary 
Slocombe and I appealed to you, Mr. Chairman, for a bipartisan 
consensus to provide the resources necessary to help protect 
American security and vital geopolitical interests. Through 
your leadership, Mr. Chairman, and this committee's support, we 
have worked together successfully over the past year to advance 
American interests and sustain American leadership.
    During that time we have made important progress. We have 
helped achieve progress toward a peaceful, free and undivided 
Europe. We are facilitating the integration into NATO of 
Poland, Hungary and the Czech Republic as they prepare to join 
the alliance. Security cooperation in Asia is on the rise. We 
have also undertaken to strengthen key alliances, major 
bilateral relationships and regional organizations.
    Our efforts are paying dividends both here at home and 
abroad, but we cannot afford to become complacent or ignore the 
challenges beyond our borders, many of which you and Ms. Pelosi 
have cited. Regional conflicts, the proliferation of weapons of 
mass destruction, persistent attempts to undermine or overthrow 
legally constituted governments, terrorist attacks on American 
citizens, instability in Russia, the ongoing crisis in Iraq, 
and others should serve to remind us that the world continues 
to be a very dangerous place.
    If Americans are to be secure in such a world, we must be 
willing to dedicate the resources necessary to protect and 
enhance American national interests abroad. And so this morning 
I am here once again to ask for your support.
    This year we will celebrate the 10-year anniversary of the 
fall of the Berlin Wall. Tomorrow Secretary Albright will 
receive the instruments of accession to NATO from the foreign 
ministers of Poland, Hungary and the Czech Republic, 
effectively completing that process for them. It is amazing 
when you go consider that only 10 years ago those nations, our 
new allies, were on the other side of the Iron Curtain.
    Our fiscal year 2000 security assistance request will build 
upon the successes of the last several years in furthering the 
efforts of Poland, Hungary and the Czech Republic as they 
deepen their military integration within NATO. And through the 
Partnership for Peace and International Military Education and 
Training program, IMET, it will assist our friends in Central 
Europe and the former Soviet Union who may want to join in the 
future.
    Our request also provides support for the OSCE's extensive 
responsibilities in Kosovo under the verification mission, its 
ongoing activities to implement peace in Bosnia consistent with 
the terms of the Dayton Agreement, and the eventual withdrawal 
of SFOR troops, and its democracy activities through Central 
Europe and the former Soviet Union.
    In the Middle East our request continues our efforts to 
bring about the comprehensive and lasting peace between Israel 
and its Arab neighbors. Accordingly I ask the committee to 
support our request for military and economic assistance for 
Israel and Egypt. These levels reflect Israel's desire to 
gradually reduce its amount of economic assistance while 
maintaining a strong security relationship with the U.S.
    We also seek your support for increased military and 
economic assistance levels for Jordan, including the 
President's emergency supplemental request to demonstrate our 
responsiveness to Jordan's economic and military assistance 
needs in the wake of the transition under King Abdullah.
    Finally, I ask for your support in increased economic 
funding for the Palestinian people.
    In Asia, our budget request supports U.S. interests in 
fortifying our core alliances, maintaining our forward 
deployment of troops, and continuing implementation along with 
our partners in the Agreed Framework. This request also 
supports efforts by ASEAN and other regional leaders to 
encourage democracy and the respect for human rights in 
Cambodia and throughout the region.
    Closer to home, Latin America continues to make great 
strides. Today, except for one lonely exception, every 
government in the hemisphere is freely elected. Peru and 
Ecuador have resolved their border dispute, and Central America 
remains free of conflict. However, the region still faces many 
challenges, especially in the aftermath of Hurricane Mitch and 
earthquakes in Colombia. Our budget request supports continuing 
market-based economic reforms; strengthening democracy, the 
rule of law, and respect for human rights; building regional 
cooperation on defense and security matters; and working with 
the region's militaries to develop sound military strategies 
and doctrines. I also ask for your support for an emergency 
supplemental appropriation to help those countries hardest hit 
by recent natural disasters.
    In Haiti, the challenge of shaping a Democratic culture and 
market economy has been especially difficult. For millions of 
impoverished Haitians, democracy has not yet delivered on the 
hope of prosperity. Our request maintains strong levels of 
support for Haiti to support programs that will help strengthen 
the economy, eradicate unemployment, hunger and rural poverty, 
and promote a professional police force and coast guard.
    In Africa, many nations face ongoing challenges, among them 
Congo, Sierra Leone, Sudan, Angola, Ethiopia and Eritrea. Even 
so, old conflicts are being settled, countries are looking to 
modernize, centralized economies are giving way to open 
markets, and civil society is beginning to flourish. Our 
assistance will encourage such continued democratic and 
economic reform and, where needed, support regional and 
multilateral conflict resolution activities. And through the 
African Crisis Response Initiative, it will also enhance the 
ability of select African nations to increase their share of 
the burden in responding to humanitarian peacekeeping crises on 
the continent.
    The area with greatest potential for serious conflict in 
renewed genocide in Africa remains the Great Lakes region of 
central Africa, where fighting could result in the permanent 
destablization of Rwanda, Burundi, or the Democratic Republic 
of Congo. Our programs in this region are designed to 
strengthen mechanisms for justice and reconciliation in order 
to break the cycles of impunity, extreme violence, and 
instability that have plagued the area's recent history.
    And in fiscal year 2000, we will continue to champion a 
cause that I know is of great concern to many on this committee 
and in the Congress, humanitarian demining. Through the 
President's Demining 2010 Initiative, we are committed to 
ensuring that civilians in every country on every continent are 
secure from the threat of land mines by the end of the next 
decade.
    Mr. Chairman, to protect the security and prosperity of our 
citizens, we are engaged in every region on every continent. 
Many of our programs and concerns are directed, as I have 
discussed, at particular countries or parts of the world, but 
there are threats that are more encompassing and can best be 
considered in global terms.
    With the dissolution of the Soviet Union, the proliferation 
of weapons of mass destruction and advanced conventional 
weapons now pose the principal direct threats to the security 
of the United States and our allies. Arms control and 
nonproliferation efforts remain a key part of our foreign 
policy strategy to keep America safe. The objectives of our 
nonproliferation programs are to reduce the risks of war by 
limiting and reducing distabilizing forces, inhibiting the 
spread of weapons of mass destruction delivery systems, and 
building confidence through measures that enhance transparency 
and verification of compliance with national commitments. We 
must and will face these threats head on and request your 
assistance in providing us the resources we need.
    Working bilaterally through export control programs, the 
Nonproliferation and Disarmament Fund, and under the 
multiagency efforts of the new Expanded Threat Reduction 
Initiative, as well as multilaterally through IAEA, KEDO and 
the CTBT Preparatory Commission, we seek to stem the 
unrestrained flow of sensitive materials, technology, and 
weapons expertise that risks the well-being not only of the 
American people, but of our friends and allies both now and in 
the future.
    I would like to thank you, Mr. Chairman, along with Ms. 
Pelosi and Representative Obey, for allowing us to move forward 
with the CTBT Preparatory Commission. This funding will allow 
the United States to maintain a leadership role in developing 
the Prepcom's work plan to further our nonproliferation and 
national security objectives. I look forward to working closely 
with you on this program.
    Let me conclude by saying that this funding that we are 
requesting directly increases the security of Americans and 
advances our direct interest in a stable, peaceful and 
prosperous international system. We undertake these programs to 
achieve specific objectives, each of which can be measured in 
terms of its success, and each of which makes America and the 
world safer. U.S. security depends on the strengthening of our 
alliances, resolving regional conflicts, limiting the 
proliferation of destabilizing weapons and assisting democratic 
forces in emerging or threatened democracies.
    Thank you, Mr. Chairman. I thank the Members for the 
opportunity to address you on the security assistance budget, 
and we would be pleased, after Deputy Under Secretary Bodner's 
presentation, to answer your questions.
    [The information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Callahan. Mr. Bodner.

                     Mr. Bodner's Opening Statement

    Mr. Bodner. Thank you, Mr. Chairman. Members of the 
committee, I appreciate this chance to talk to you this morning 
about U.S. security assistance programs and how they benefit 
American national security interests. Mr. Chairman and 
Representative Pelosi, your leadership and the support of the 
rest of the committee provide us with the tools that we need to 
protect and promote American national interests by shaping the 
world environment, not simply reacting to it.
    Enhancing the capabilities of our friends and our allies to 
address conflicts, humanitarian crises, and natural disasters 
makes it less likely that American forces will be called upon 
to respond to regional problems, and it also limits their 
involvement when they are called upon.
    Security assistance programs help to ensure that when we do 
employ our forces, foreign militaries can work with them more 
efficiently and effectively rather than being hobbled by 
mismatched equipment, communications and doctrine.
    Our engagement activities promote the principles of 
democracy, respect for human rights, and the rule of law. And 
indeed, one of our most cost-effective security assistance 
programs, and some would say the most cost-effective security 
assistance program, is the International Military Education and 
Training program. IMET provides foreign military and civilian 
defense officials professional education opportunities at 
senior service staff colleges, as well as technical training in 
areas such as maintenance and aircraft engine repair. By doing 
so, the IMET program fosters military-to-military relationships 
and promotes military professionalism in foreign militaries. 
These benefits are key to our gaining cooperation of others to 
conduct combined operations as well as to improving their 
ability to defend themselves and operate with each other. IMET 
training also ensures that small unit and field commanders know 
how to conduct operations in ways that are both effective and 
respectful of human rights.
    These traditional military education and training programs 
account for about 70 percent of the IMET program. The remaining 
30 percent is conducted under the Expanded IMET program, which 
focuses on issues such as responsible management of defense 
resources, civilian control of the military, and improving the 
military justice systems so they accord with international 
standards of human rights.
    This year the administration is requesting $52 million for 
IMET for fiscal year 2000, which is a $2 million increase over 
fiscal year 1999. This increase would be devoted primarily to 
our programs in central Europe, both to support the three new 
members of NATO and to support the Partnership for Peace 
program. We also propose to restart our IMET program with 
Nigeria.
    The political and military benefits of the IMET program are 
the main reason why this year we are also requesting that IMET 
funding be extended to Pakistan--we appreciate the comments 
that you made Ms. Pelosi. In addition, we recommend extending 
full IMET to Guatemala and Indonesia.
    In each of these cases we do believe that IMET contacts 
will promote democratic values and be effective tools for 
achieving our national security and our foreign policy 
objectives, including greater adherence to international 
standards of human rights. Allowing the administration to offer 
these traditional IMET courses will help to reform these 
militaries by exposing a new generation military officers and a 
broader spectrum of students--to our standards of military 
professionalism.
    Let me briefly address the military training report that 
Ms. Pelosi discussed. It was directed by Congress last year 
that DOD and State Department together produce a report. We 
submitted that report on Friday. We briefed members of your 
staff about it. The report documents extensively the more than 
52,000 education and training activities that were undertaken 
in fiscal year 1998 and that we project to undertake in fiscal 
year 1999.
    During the briefing, members of your staff asked a number 
of questions, and we are in the process of addressing them. In 
particular, I want to assure the subcommittee that we are 
reviewing the classified annex on JCETs and CINC activities and 
will declassify as much information as possible and produce 
those as quickly as possible.
    Ms. Pelosi. I appreciate that.
    Mr. Bodner. As you know, a vast majority of our security 
assistance funding, of course, is in the FMF program, the 
Foreign Military Finance program. This supports our security 
goals by enabling key friends and allies to improve their 
defense capabilities by financing the acquisition of U.S. 
military articles, services and training. And I just would like 
to emphasize that there has never been doubt that the FMF 
program also promotes U.S. national security interests by 
strengthening coalitions with friends and allies, cementing 
cooperative relationships with foreign militaries, as well as 
enhancing the interoperability of U.S. forces with those 
foreign militaries.
    This year we are requesting $3.43 billion for Foreign 
Military Finance, which is an increase over the 1999 
appropriation of $80 million. As you mentioned, Mr. Chairman, 
the overwhelming bulk of the request for FMF is to support 
regional peace efforts in the Middle East. When you take into 
account the increases proposed for Israel and Jordan, FMF for 
countries outside the Middle East will decrease by $10 million 
compared to the fiscal year 1999 level. Of the portion that 
will not be devoted to the Middle East, the largest recipients 
will be the three new members of NATO to facilitate their 
integration into the alliance.
    In addition, the request that we are proposing will allow 
us to continue our support for the Partnership for Peace 
program, help sustain a small professional defense and maritime 
force in the Caribbean, and bolster African countries' 
capabilities to conduct limited peace and humanitarian 
missions.
    Finally, I would note that FMF money is used to purchase 
U.S. military equipment and services, and that means that 
American workers as well as the defense industrial base benefit 
from our security assistance program.
    These various programs I have just outlined are truly 
critical to our national security agenda, and they are critical 
tools in promoting our national interests around the world. 
Security assistance directly works to benefit U.S. taxpayers, 
and there is a genuine linkage between the activities that we 
conduct under the program and the interests of average 
Americans. We genuinely believe that the dollars spent to 
enhance the defense capabilities of our friends and allies to 
improve their interoperability with U.S. forces and with each 
other yield benefits to the American people far in excess of 
the cost, and I urge you to support the request we are making. 
I appreciate the chance to talk to you this morning.
    Mr. Callahan. Thank you.
    [The information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Callahan. I have a feeling Ms. Pelosi is going to ask 
some questions before we leave, but we have a vote on now. I am 
going to, with your indulgence, yield my 5 minutes to Mr. 
Knollenberg, who has a conflict, as I am sure every member on 
the subcommittee does. And let me encourage all of you that if 
you do have pressing conflicts and there is something of 
extreme importance, we sometimes jump around to facilitate your 
schedules.
    Joe, you can start now. I would like for to you wait until 
I get back from voting before you get into KEDO. Is that the 
subject?
    Mr. Knollenberg. That is the subject.
    Mr. Callahan. Well, why don't we go vote and come back. I 
will yield to Mr. Knollenberg my 5 minutes.
    Ms. Pelosi. And I will follow the lead of my Chairman, too, 
and yield to my colleagues.
    Mr. Callahan. Why don't we just go vote.
    [Recess.]
    Mr. Callahan. I think we are going to have a series of 
votes; nevertheless we will have to work ourselves around the 
votes.
    Mr. Knollenberg.
    Mr. Knollenberg. Mr. Chairman, thank you.
    And welcome, Mr. Holum and Mr. Bodner.

                              north korea

    Let me get into this quickly, and I do appreciate the 
Chairman giving me this recognition early on. I have four 
hearings this morning, but this is one I am very much 
interested in.
    As you know, recent media reports claim that Kumchang-ni in 
North Korea is related to the construction of an underground 
graphite-moderated reactor for the production of plutonium. 
North Korea is denying that such an underground complex exists. 
U.S. officials, I understand, have demanded access to the site, 
and they have been denied. They have, in fact, been asked to 
pony up $300 million as some kind of carrot in return for 
access to the sites.
    Now, along with this particular site there are many other 
facilities that could be utilized for the production of nuclear 
weapons, including reprocessing facilities to separate 
plutonium for U235 fissile cores and highly secured storage 
facilities. The administration is apparently making no effort 
to gain access to these other facilities, and that concerns me.
    The administration has clearly focused all of its efforts 
in the ongoing negotiations with the North Koreans in New York 
on attempts to gain access to the Kumchang-ni underground 
facility. That is important. I understand that. But there are 
several other sites that we are looking at here, and myself, 
along with Majority Leader Armey, Chairman Ben Gilman, and 
others, sent a letter to Mr. Perry, who is in a mode right now 
to make some efforts over there. And the whole focus of that 
letter was to make sure that we know, for example, that North 
Korea is complying with the Agreed Framework. I know they are 
asking for money, and they have no business asking for money. 
We know they are not living up to the agreement.
    What can you tell me about our efforts specifically to gain 
access to those other sites.
    Mr. Holum. Mr. Knollenberg, there is a limitation on what I 
can say in open session about intelligence assessments. I can 
tell you that as to the Kumchang-ni site, we are nearing the 
end of another round of negotiations. The North Koreans 
understand that a successful resolution of that issue will 
require access to the site sufficient to confirm that no 
activity in violation of the Agreed Framework is or will be 
conducted there.
    What that says about additional concerns that have or may 
arise is that it sets a precedent for our approach to these 
issues in the sense that although we haven't yet concluded that 
Kumchang-ni is a violation of the Agreed Framework only to the 
extent to which it has progressed, nonetheless we need to have 
assurances that the commitments under the Agreed Framework are 
being fulfilled and that this is a test of their willingness to 
comply.
    We will address other issues as they arise. It is very 
important, I might add, that you have made your views known to 
former Secretary Perry. He is engaged in a comprehensive 
review, as you know, of our overall policy with North Korea. He 
is now in the region consulting with allies including Japan and 
South Korea, and we are looking forward to the results of his 
review. This entire----
    Mr. Knollenberg. That would be the end of March or 
thereabouts?
    Mr. Holum. We haven't put a deadline on his deliberations 
for the reason we want him to have as complete as possible 
access to the information he needs and take whatever time is 
necessary, recognizing that this is an urgent matter. One of 
the things that he has done in the process of this is consult, 
as you know, with interested Members of the Congress, including 
a very helpful session that I sat in on at our offsite with 
congressional staff. And we have been very receptive--he has 
been very receptive to hearing your views, so I am glad you 
conveyed them.
    Mr. Bodner. Let me add two points to that. First, the 
existing facility at Yongbyon, the reprocessing facility and 
reactor with the spent fuel, it is very important that we make 
sure that that remains closed and not operational. That is very 
important and why we think at the present time we should 
continue the Agreed Framework, if possible, to keep that 
facility, which we know exists and once was operating, closed.
    Second, at Kumchang-ni, as Mr. Holum said, we do need 
access to that site and are engaged in discussions with the 
North Koreans to gain that access.
    Third, were there to be other sites, our discussion with 
North Koreans on Kumchang-ni is the precedent, because 
obviously if we had serious concerns, we would also need access 
to them.
    Mr. Knollenberg. I appreciate that response. I recognize 
the sensitivity, too, of breaching an area that we cannot speak 
openly about. But let me go on to a question that has to do 
with the ICBM technology. And, of course, you are very 
familiar, I know, with the development that North Korea has 
reached in terms of the multistage rocketry.
    The Washington Times and other publications recently 
reported that China is sharing this space technology with North 
Korea. More specifically, they believe that China provided the 
third stage and satellite technology to North Korea, which gave 
the Taepo Dong its intercontinental range. In light of the 
recent security breaches at our national weapons labs--and this 
gets into a sensitive area, this is very disturbing, and I 
think that it should be raised with the Chinese--to my 
knowledge, the administration has not raised that issue with 
the Chinese. In my view, the most serious issue related to 
North Korea is not failure to abide by some agreement, it is 
rather the very real threat posed to American security by rogue 
nuclear states, and the facts are very ominous.
    North Korea, number one, is very likely engaging in nuclear 
weapons production at several sites throughout the country; and 
then, number two, the recent launch verifies suspicion about 
North Korea's ICBM capability. This threat is magnified by the 
Chinese involvement in the export of missile technology to the 
rogue regime, thus aiding North Korea in the construction of a 
delivery system that is capable of reaching American shores.
    What I would like to ask you is what can you tell me about 
China providing satellite and third-stage boost technology to 
the North Korean ICBM or Taepo Dong ICBM that is designed to 
reach the United States? What can you give me? What can you 
tell me about the accuracy of that statement?
    Mr. Holum. Well, again, we have the same limitation on 
discussing intelligence matters. I can tell you that missile 
issues, both missile issues relating to Chinese assistance 
through technology to other countries and the issue of North 
Korea, are routinely on our agenda in discussions with the 
Chinese officials at all levels, including the highest levels.
    Mr. Knollenberg. Can you tell me if Secretary Albright made 
that a part of her discussion recently with the officials?
    Mr. Holum. I can't, but I can check on it for you. 
Certainly the missile issues and North Korea issues.
    [The information follows:]
    We have no evidence to confirm press reports that China is 
providing North Korea's missile or space programs with U.S.-origin 
technology.
    Nor are we aware of any evidence that China is engaged in 
assistance to North Korea's space program that would be inconsistent 
with the MTCR Guidelines.
    Therefore, the Secretary did not raise these reports with Chinese 
officials.
    However, as part of our continuing nonproliferation dialogue with 
China, the Secretary underscored our concerns about the threat to 
international peace and stability posed by missile proliferation during 
her visit to Beijing in March. She also discussed with Foreign Minister 
Tang a broad range of missile nonproliferation issues, including 
China's implementation of the export control and nonproliferation steps 
necessary for it to join the MTCR.

    Mr. Knollenberg. Those issues were raised during the recent 
meeting; is that correct?
    Mr. Holum. Yes.
    Mr. Bodner. I don't believe the Intelligence Community has 
come to a conclusion on the question that you raised, but I 
believe we would be happy to share whatever information we 
have.
    Mr. Holum. More broadly in the case of China's assistance 
on missile capabilities, as you know we have twice sanctioned 
China for missile exports. The most recent sanctioning in 1993 
gave rise to their commitment to not export MTCR-class missiles 
to any country. That commitment actually goes beyond the 
requirements of the MTCR and, to our knowledge, they are 
abiding by that commitment. We have seen no indication that 
they are transferring MTCR-class missiles to other countries.
    At the same time we have very serious concerns about their 
interpretation, particularly as to technology, missile 
technology, of their obligation and of the MTCR commitment. 
That is one of the reasons why one of our leading objectives is 
to achieve their formal adherence to the Missile Technology 
Control Regime, including the technical annex that would 
include exports of those technologies, but it is a matter that 
is not resolved, and we are not satisfied at the moment.
    Mr. Knollenberg. There is a heightened awareness, is there 
not, among the administration officials about the situation 
with respect to this issue, this particular focus?
    Mr. Holum. No question at all, and we will doubtless get 
into this. One of the key reasons why the United States is 
including money, and Deputy Under Secretary Bodner can 
certainly address this, why we have included funds for the 5-
year defense program, 5-year defense plan for deployment--
possible deployment of the national missile defense is the 
growth in North Korea's missile capabilities and particularly 
the third stage. It has elevated the----

                                  KEDO

    Mr. Knollenberg. If I could go to a final question, and I 
appreciate your willingness to give me this time up front. I 
want to go to KEDO, the agreement itself, the framework and 
part of the Agreed Framework that was established to gather 
contributions from interested countries to finance the 
construction of two light water reactors in North Korea. Japan 
and South Korea, as you know, have primary responsibility for 
financing this project. These countries decided it would be 
better and would be sold in their own home countries if they 
were to characterize this as a loan instead of a contribution 
in order to make, as I say, make it more acceptable back home. 
At the same time, we are assured that there was little 
likelihood that North Korea would come through with payment.
    This reality has raised the question of whether KEDO, in 
the absence of North Korean payments, will be expected to 
guarantee the Japanese loans. And if KEDO would, in turn, look 
to the U.S. for additional funding to cover these costs. So the 
question, I think, is fairly obvious: Given the fact that the 
Japanese contribution to KEDO's project is in the form of a 
loan, what is KEDO's liability to repay Japan in the very 
likely event that North Korea will be unable to pay? And will 
the U.S. be asked to step in and shore up that negative?
    Mr. Holum. Let me begin with the last part first. The 
United States does not bear financial liability for any KEDO 
debts incurred with respect to the light water reactor 
construction. That is the opening proposition. Japan and the 
ROK are committed politically most recently to the KEDO light 
water reactor cost-sharing resolution of October 21, 1998, to 
contribute respectively $1 billion toward--and that is in the 
case of Japan, and 70 percent of the total cost, that is Korea, 
the light water reactor project, which is based on an estimated 
total cost of $4.6 billion. The ROK and Japanese decisions to 
style their financing as loans to KEDO does not alter their 
commitment to fulfill those funding obligations.
    Mr. Knollenberg. Their commitment has not been met of late, 
though, that they would be on target?
    Mr. Holum. They are moving in that direction. One of the 
things that was a disturbance of the progress was the Taepo 
Dong launch, which caused the Japanese to suspend consideration 
of their participation. But we believe that all the parties 
understand fully the essential nature of the financing and that 
neither KEDO nor the United States will be financially 
obligated to the light water reactor.
    Mr. Bodner. Mr. Knollenberg, it is fair to say that Tokyo 
and Seoul have been informed consistently in the last few years 
of the U.S. views on this.
    Mr. Knollenberg. Thank you, Mr. Chairman.
    Mr. Callahan. Just following up on KEDO, I appreciate the 
patience the White House and the State Department has had in 
trying to educate me in foreign policy. I have tried with every 
ounce of resource I have to try to understand this KEDO 
situation from a layman's point of view without ever walking 
away from it with a feeling of despair over what I perceive as 
almost the stupidity of this agreement from the word go.
    This is one project that has happened under my watch 
because the funding first started 4\1/2\ years ago, 5 years 
ago, but now it has grown to the point where it is almost 
getting ridiculous. I mean, the administration's request for 
$50 million for North Korea? You know, we started off at $13 
million and Mr. Carlucci told this committee then that if we 
didn't give them $13 million, the world was going to come to an 
end, and we were going to have a nuclear holocaust, and he was 
going to blame it on me.
    Well, that would have been all right, too. He could have 
blamed it on me, but we gave them the $13 million so we 
wouldn't have this nuclear holocaust because we were told at 
the time that this would stop the advancement of nuclear 
capabilities in North Korea. That part was logical.
    Why we were ever involved at this stage, I don't know. 
Negotiating the project with Japan and South Korea, that is 
good, but why we are the only country putting up any money to 
facilitate this peace process between the two countries and not 
making any progress, and North Korea not paying any attention 
to the agreement just is beyond explanation to me.
    Maybe it is over my head, and maybe you professional 
diplomats and professional foreign affairs experts, maybe you 
can adjust your own logical thinking to justify this, but this 
is never going to stop. We are going to have the first brick 
laid on building a power plant.
    The power plant never should have been built in North Korea 
anyway, it should have been built in South Korea right on the 
line, and they should have put power lines over there so if 
North Korea ever started violating things, they could cut the 
power off. But that is above my pay grade, too.
    But we are getting to the point where we don't have $55 
million to put into North Korea to continue this project, and 
in addition to that, the administration is borrowing money such 
as they are doing with the $19 million that Joe Knollenberg 
mentioned. My assessment of that is that Japan is saying, look, 
we want this project to go forward so we can be protected 
against nuclear attack by North Korea, and we are pledging to 
put up 3 of the 10 billion over whatever they are putting up. 
Nothing is done. Japan has not spent a penny, and you are 
saying this thing is falling apart. The Congress is balking. So 
Japan says, I will loan you $19 million. They didn't give you 
$19 million. They are advancing you 19 million, and probably 
you are going to be back here next year saying, now we have an 
additional debt, which the debt in itself I have never been 
pleased with.
    I don't know who gave you all the authority to go into 
debt, and I recognize that you had pledges from other nations 
who are not coming through. But you keep borrowing more and 
more money, you keep coming to Congress telling us that there 
is zero progress, but there are still problems. The South 
Koreans and the Japanese are not really spending any money, 
although I know they are doing some ground-breaking over there. 
We cannot keep this up. You are not going to get this $55 
million this year unless you come up with some suggestion as to 
how we reshuffle the money that is going to be made available 
to us, which is going to be an even greater problem. You sit 
over there and think of all these grandiose ideas that maybe 
sound good when you are meeting with leaders of these 
countries, and then you start contending that is an obligation 
of the United States of America.
    For example, Egypt. You are talking about giving them some 
type of interest-bearing account, which is going to cost your 
agency millions of dollars if it is scored like CBO is telling 
us it is going to be scored. That sounds good when you are 
sitting down with Mubarak. Oh, Mr. President, we love you. We 
love Egypt. We support that. We will ask the Congress to put 
your pipeline money in interest-bearing accounts.
    You don't ever think about money. You know and I know that 
the budget resolution that is going to be considered in a few 
weeks by the House and the Senate, and probably adopted, is 
going to reduce the resources available to this committee to 
provide you with money. Yet you keep coming forward with all of 
these programs, and then you keep coming forward with these 
requests of $55 million. What is that; what kind of increase is 
that percentagewise? $20 million, that is nearly a 40 percent 
increase in appropriations for KEDO, which you tell us is not 
quite working.
    But you have got Mr. Perry over there now, and I have great 
respect for him, great admiration and great confidence, but the 
answer to everything is not more money, and we are going to 
have to look carefully at this request.
    I don't want to run the foreign policy of this country. The 
people elected President Clinton to do that. He appointed 
Madeleine Albright, and I have great respect for Madeleine 
Albright, and I think she is doing a wonderful job, and I don't 
want to get involved in it. But we are getting down to the 
point where I don't have the money. I have got to pick and 
choose.
    So you want to go back to my district, as Mr. Carlucci told 
me he was going to do 5 years ago, and tell the people of my 
district that I am going to be the one responsible for nuclear 
disaster that is pending if I don't give him $13 million. And 
so be it. That is all right. But the reality of the thing is 
you have got to make some cuts somewhere if you are going to 
ask for increases in projects such as KEDO and projects such as 
the Egyptian pipeline money.
    You all have got to come to reality over there and 
recognize that without a doubt--and here I am, someone who had 
never voted for a foreign aid bill before I became Chairman of 
this committee and wrote the bill right, here I am having to go 
and argue with my conservative friends on the Republican and 
the Democratic side about, look, don't cut me. Cut education, 
cut HUD, cut all of these other things. Cut Medicare, cut 
Social Security and give me a billion dollars more.
    So I am here fighting for you now. But even if I got the 
billion dollars back, it is going to be insufficient. And you 
all have got to tell me how you want to cut it down. You cannot 
come over here and ask me for $2 billion because someone wanted 
the Wye agreement to succeed. Give me 2 more billion dollars, 
give me another interest-bearing account; the interest-bearing 
account for Israel is wrong. So you are going to say we are 
going to make two wrongs to try to make a right? That is wrong, 
too.
    You have got to realize we are not going to have the money 
this year, and if you want this additional $20- increase for 
KEDO, and if you want all of these new plans, you are going to 
have to tell me where you want to cut. You cannot just say, 
give me a billion dollars. We are not going to have $18 
billion. So we are going to have to do the cutting. So there I 
am directing foreign policy, which I don't want to do.
    You are the professionals. You are going to have to give me 
a list of your priorities. But the requests are unreasonable 
under the circumstances of reality, and that reality is we are 
not going to have the money to do these things.
    So KEDO, I don't understand. Occasionally they call me 
upstairs and put me in a room lined with lead and tell me if I 
tell anybody about this, they are going to kill me, or somebody 
will die. I don't even want to go up there and hear all of 
that. So don't tell me about that.
    I talk about money. I am going to be told that I have to 
cut last year's appropriation, not including the $18 billion 
for the International Monetary Fund. But I am going to have to 
cut this year and cut drastically. So it is not whether or not 
Sonny Callahan or this committee thinks you should have more, 
it is the reality. It is the real world. And you guys are going 
to have to come forth with an explanation or a request 
prioritizing your needs.
    You can override me on KEDO, because I am not as talented 
in foreign policy as you all are. And you can override me on 
Egypt if you want to, but you have got to tell me whether you 
want me to take it out of USAID's hide or whether you want me 
to take it out of Israel's hide, or whose hide do you want me 
to take it out of. We are not going to have the money to 
fulfill these requests. And this increase of 40 percent for 
KEDO borders on the fringe of absolute stupidity, in my 
opinion. So I am concerned about it. You guys say it is 
absolutely necessary. And I have got to go vote before you can 
respond.
    Mr. Bodner. Mr. Chairman, you raised a number of topics. I 
don't know if you have to leave right at this moment. Maybe I 
could respond on KEDO, and John could respond on the broader 
questions on the budget, because the KEDO question is genuinely 
a security question.
    Mr. Callahan. Let me go vote. You can answer that when I 
get back. You can stay if you want.
    Ms. Pelosi. I can't be asking questions without the 
Republicans in the room.
    Mr. Callahan. I will let you be Chairman. Raise your right 
hand.
    Ms. Pelosi [presiding]. I want you gentleman to know that 
there is no hourglass here today. There is no mace, pointy 
objects, nothing.
    Well, this is highly unusual because usually we have at 
least one Republican chairing the committee, and I will 
probably have to run in a little bit, but in deference to your 
time, I wanted to come down to start my questions.
    The Chairman and I are in disagreement over KEDO, the 
framework agreement, although I think his questions are very 
legitimate and really deserve to be answered.
    As far as North Korea, just for a moment, I would say that 
one of the justifications for the administration's China policy 
is that China is going to help us with North Korea. I don't 
think they have used their good offices to that effect, and as 
Mr. Knollenberg raised the issue of the possible cooperation of 
the Chinese, I don't want to go any more into that because I am 
a member of the Intelligence Committee. But, I think it is 
something that has to be looked into and again, it would be a 
serious undermining of one of the major justifications for the 
current China policy. I think that whether or not that is true, 
the mythology of Chinese cooperation on North Korea is just 
that, a mythology. We have not had the cooperation that we 
should on this really very, very dangerous place in the world 
where we have our troops on the border.
    I was in P'yongyang a year and a half ago with the 
Intelligence Committee, and I have very serious concerns. That 
is why I come down on the side of the administration on KEDO, 
because I don't think that we have a lot of options. That is 
one. Yes, the North Koreans have not cooperated fully to the 
spirit of the law, but I continue to support that framework 
because I saw what a desperate situation it is there, and any 
opportunities that we can have there I think we should take 
advantage of. I was surprised the North Koreans even let us in.

                                colombia

    I want to go to some of the issues that I raised in my 
opening statement. Based on that statement, I think it is clear 
that I don't believe that Congress was either consulted or 
informed on the decision to aid Colombia in the formation of 
the counternarcotics battalion within their army. It is also 
clear that a commitment to form and train an 800-man battalion 
implies a long-term commitment for U.S. troops in Colombia and 
brings about the need for significant resources to equip such a 
force. It is also a significant departure from the policy 
Congress has debated and endorsed; that is, helping the 
Colombian police with a well-directed counternarcotics 
assistance program.
    Can either of you tell me why Congress was neither 
consulted nor informed of this decision?
    Mr. Bodner. First of all, this is a matter that is still in 
process, Ms. Pelosi. The Colombian Government made public 
statements last fall that they had desired to form a 
counternarcotics battalion, about a thousand people. We have 
engaged in discussions with them since then as their ideas have 
evolved, and they have evolved, they have changed.
    These discussions have been held primarily between our 
Embassy and the Colombians, and SOUTHCOM has been engaged in 
that as well. The current status, as I understand it, is that 
the Colombians have stood up a single company which is fully 
vetted. So far no U.S. training has been provided; however, 
they have been working with the Embassy and with SOUTHCOM to 
define what the requirements of the unit would be and, 
therefore, how it is that we might be supportive of them 
through some training.
    My understanding is that the Embassy forwarded some 
specifics on that to SOUTHCOM just this Friday. They have not 
yet come to Washington yet. When they do come up, we will 
review this and will be happy to continue consultations with 
Congress. There have been briefings held on the Hill regarding 
the status of this concept for a counternarcotics battalion 
that the Colombians want to form, and we will be happy to 
provide more information as it develops.
    You raised a couple of other elements about it in terms of 
authorities. If we were to provide training--and I think it is 
likely that we will, although we are still defining that--we 
would do so under the congressional authorities that have been 
granted under sections 1004 and 1033 of Title X, and I would 
note that 1033 is specifically about Colombia and Peru--
specific authorization granted to DOD by the Congress to 
provide counternarcotics support to Colombia and Peru.
    So I think that we feel that we, in fact, are complying 
with the will of the Congress and fully with the law and all 
the strictures that are included in 1004 and 1033. Again, we 
would be happy to brief your staff again. I think we already 
have briefed your staff with regard to this concept as it has 
developed, and we would be happy to keep you fully informed.
    Ms. Pelosi. Obviously, I would like the record to show that 
the briefing took place only after we insisted upon having a 
briefing.
    Can either of you tell us why none of the training or 
assistance planned for this was directed to respond to the 
paramilitary forces running rampant in Colombia? In January, 
over 140 people were killed by paramilitary forces in 15 
locations over a weekend. No significant arrests have taken 
place.
    Mr. Bodner. Again, I believe that this battalion, as the 
Colombians have conceived it, would be engaged in 
counternarcotics work. I do know that the Colombian Government 
is very concerned about these paramilitary groups. I met with 
the Colombian defense minister recently, and he expressed grave 
concern about it and described some actions that they are 
taking. As you know, there is a new Colombian Government.
    Ms. Pelosi. I have met the President. I am encouraged by 
him.
    Mr. Bodner. And a reform-oriented government. We have to 
face the question: Are we going to support that government or 
stand by and have it work on its own? We could do either, but I 
think that we would more effectively meet our objectives if, in 
fact, we work with them.
    Our objectives are both trying to stem narcotics flow and 
trying to instill greater respect for human rights. And I think 
that, in fact, is the entire idea behind the formation of a new 
counternarcotics battalion.
    Ms. Pelosi. I hope that you are going to support the new 
Colombian President in his efforts to make peace with the 
insurgents as well, because some of these actions look like 
they could be counter to that.
    Specifically, how much will the training of this battalion 
cost, how long will it take, and from what accounts will these 
funds be derived?
    Mr. Bodner. We are under the authorities of section 1004.
    Mr. Kingston [presiding]. If the gentleman will suspend, I 
am going to go vote, and I will be right back in time for you 
to go vote. So if we could do that.
    Ms. Pelosi. Thank you, Mr. Chairman.
    You were telling me what the training battalion would cost, 
how long it will take, and what accounts it would be coming 
from.
    Mr. Bodner. If training proceeds, what we would envision is 
that it probably would proceed in three phases, each of which 
would last approximately 90 days, in which individuals and 
company-level training would be conducted. The third phase 
would be battalion-level multiechelon exercises that would also 
involve the Colombian National Police. Just as other Colombian 
Armed Forces units provide support to the police and work 
together with them, this unit, which is focused on 
counternarcotics as the Colombians envision it, would work 
closely with the Colombian National Police.
    As to the amount for equipment, again, none of these things 
are finalized, but if training were to proceed, we would 
anticipate that under section 1004 approximately $2 million in 
nonlethal equipment would be provided during fiscal year 1999. 
Similarly, under 1033, which again is a congressional 
authorization specifically for Colombia for counternarcotics 
support, about 2 million in nonlethal equipment would be 
provided.
    Ms. Pelosi. As I mentioned earlier, I had the opportunity 
to hear the new President when he was here, and, yes, it was 
right before the election. He is attempting to foster 
negotiation with the guerrillas, and my question is how does 
the formation of this battalion promote the prospects for 
peace?
    Mr. Bodner. As you say, President Pastrana is very 
committed to a peace process.
    Ms. Pelosi. I understand that. I am concerned about the 
battalion's commitment to the peace process and how this 
battalion is in furtherance of his goals, specifically that 
numerous challenges to achieving the settlement would take a 
long time and would require economic incentives for the 
guerrillas and for poor people who live in guerrilla-controlled 
territory. So I just wonder how this battalion is in 
furtherance of that.
    Mr. Bodner. President Pastrana and his government have 
proposed this battalion. Their proposal. Their concept. They 
are still refining it. I have to assume that they believe it is 
part of their reform effort.
    Ms. Pelosi. This is a request from President Pastrana?
    Mr. Bodner. In terms of a training request that is now 
being moved through the system--and as I understand it, it is 
going to SOUTHCOM on Friday and will be coming to Washington 
soon--the training request for the counternarcotics battalion 
is a concept that the Colombians have pursued as part of their 
overall reform efforts.
    Ms. Pelosi. I better go vote. Excuse me.

                                  kedo

    Mr. Kingston. I know you have already spoken about KEDO. Do 
you think we should have a briefing on KEDO by itself? I mean, 
a $20 million increase is big. Should DOD or State, give us a 
separate briefing or----
    Mr. Bodner. It is part of the U.S. security interests. We 
would be happy to come up and give a briefing to you.
    Mr. Holum. I know that Secretary Perry plans to come back 
to the Capitol Hill again before he completes his 
deliberations. That would not be to a specific committee. It 
would be to talk to Members who have been particularly 
interested in the overall North Korea problem. But I think 
overall, our overall policy, which we are in the process of 
reviewing through Secretary Perry's leadership, as well as the 
specific funding request, as Deputy Under Secretary Bodner 
says, deserves careful scrutiny.
    One thing I would point out is one of the big concerns is 
over the amount of money that the United States has put in. Our 
obligation is at the early part of this. That is for the heavy 
fuel oil until the first reactor is completed. And that 
obligation runs around $50 million a year.
    We have made extremely persistent efforts to gain support 
from other countries for the heavy fuel oil fund. We haven't 
been as successful as we would like to be. But at the same 
time, the debt of KEDO on heavy fuel oil is not going up, it is 
going down. One of the virtues of low oil prices is that KEDO 
has been able to retire some of that debt, and we expect that 
by the year 2000, the end of fiscal 2000, if prices stay low, 
it could extinguish the debt.
    Mr. Kingston. Getting beyond KEDO itself and on the subject 
of nuclear proliferation, George Tenet has said that they are 
on the verge of developing some ballistic missiles, that maybe 
we should have a classified briefing just on proliferation, and 
that might be approved.

                      peru-ecuador peace agreement

    Let me ask you, you requested $20 million for economic 
support funds for the Peru-Ecuador peace agreement. Do you know 
how you are going to spend that? Is that defined yet? I mean, 
is that just kind of to pay everybody a little money to settle 
things?
    Mr. Holum. No, the basic program is designed to reinforce 
the October 1998 peace agreement, which we, as a guarantor of 
the Rio protocol, helped to broker. Peru and Ecuador have 
developed a 10-year program to strengthen and integrate 
communities, particularly on either side of the common border 
where the fighting broke out. This program includes telephone 
service, oil pipelines, road construction, energy projects--a 
variety of programs that do two things. One is improve the 
lives of the people living there, and secondly, demonstrate 
that they have a stake in integration across the border.
    So it would support microentrepreneurs and a number of 
steps that we think would help solidify the peace as agreed on 
paper in the 1998 peace agreement.
    Mr. Kingston. Twenty million dollars for roads, telephones, 
communications, training?
    Mr. Holum. Telephone service, oil pipelines road 
construction, energy projects, projects of that kind.
    Mr. Kingston. Is that split equally between the sides? How 
do you decide?
    Mr. Holum. I will have to get that information for you. I 
believe it is, but I am not absolutely certain.
    [The information follows:]

                      peru-ecuador peace agreement

    In October 1998, Ecuador and Peru signed a comprehensive 
peace agreement that put an end to an often bloody, century-
and-a-half old conflict over demarcation of their border. The 
United States, as one of the Guarantors of the 1942 Rio 
Protocol, which established the framework for delimiting the 
border, invested considerable time, effort, and resources in 
helping the parties to achieve this peace. To make it 
acceptable to both sides, regardless of the final demarcation 
of the border, the peace settlement was built on a series of 
agreements, including a treaty of commerce and navigation and a 
binational peace fund for border integration, designed to 
compensate difficult political concessions with investments to 
stimulate growth and improve living conditions in an area 
impoverished by years of conflict.
    The United States plans to provide $10 million each to Peru 
and Ecuador in FY 2000 to help launch, under the border 
integration agreement, a ten-year program Peru and Ecuador 
developed to strengthen and integrate communities on either 
side of the border through improved telephone service, oil 
pipelines, road construction, energy projects, and other 
efforts to improve the lives of their citizens.
    The Economic Support Funds (ESF) will aid successful 
implementation of the peace settlement by helping to fund the 
border integration program by, among other things, supporting 
micro-entrepreneurs, strengthening local governments, improving 
health care, and helping to create permanently demilitarized 
``peace parks'' along the border to enhance natural resource 
management. Specific projects for which U.S. funding is 
proposed will be reviewed and approved by USAID and the State 
Department. Other governments and international organizations, 
including the Inter-American Development Bank, the Andean 
Development Bank, and the World Bank, are also supporting this 
border integration program with donations of their own.

    Mr. Kingston. Is that expected to be an annual expenditure, 
or is that a lump sum for $20 million?
    Mr. Holum. We haven't planned specifically beyond fiscal 
year 2000. I suspect we will conclude that we have a stake in 
continuing to foster this effort.
    Mr. Kingston. I would like to see that, because I hate to 
just keep propping up--$20 million is a big deal, and there 
really should be, particularly on a peace-type agreement, an 
end at some point. An escape route.
    Mr. Holum. I think in principle that makes a great deal of 
sense, but I think the transition period from conflict to a 
peace, durable peace, is very much in our interest, and we 
ought not go backwards into a conflict situation.
    Another thing we need to do in this context is giving 
support to other governments and international organizations, 
including the Inter-American Development Bank and the Andean 
Bank, the World Bank. This is not purely a United States 
endeavor and shouldn't be. It is a collective effort to try to 
solidify the settlement.
    Mr. Bodner. You have raised an important point. Let me 
point out a couple of ancillary benefits from the end of the 
Peru-Ecuador conflict. We had been providing helicopter support 
to the observer group. We are no longer doing that.
    Also, as a benefit of the conflict having been brought to a 
close, Ecuadorans are focused on securing their border with 
Colombia, which has benefit in terms of counternarcotics. So it 
is important also to view it in the overall picture.
    Mr. Holum. I can give you the numerical breakdown between 
Ecuador and Peru. It is slightly imbalanced in Ecuador's favor: 
$11.75 million, Ecuador; and $8.25 million for Peru, total.

                        environmental diplomacy

    Mr. Kingston. Yeah, I would kind of like to see the 
breakdown, why they get about 12, 11.5, whatever.
    On the environmental diplomacy you are requesting $15 
million for the account. Is that a new account? And how is it 
earmarked? What is that money going to go to?
    Mr. Holum. Let me flip to the appropriate page here.
    It is an additional account, and it is basically designed 
to advance the international environmental health agenda.
    Mr. Kingston. Is that--are you talking about Kyoto? 
International environmental health agenda? Is that part of the 
Protocol?
    Mr. Holum. This is not specifically designed to support the 
Protocol, but it is designed for cases where we want to be able 
to respond quickly with programmatic answers to a problem that 
can help a----
    Mr. Kingston. Was something like this a component of the 
Protocol?
    Mr. Holum. No, I don't believe so.
    Mr. Kingston. So it is not a back door?
    Mr. Holum. No, no.
    Mr. Kingston. All right. Shouldn't that go through 
Commerce-State-Justice?
    Mr. Holum. Well, it is programmatic, though. It is 
basically to respond quickly to emerging environmental crises 
and advance negotiating positions at the same time.
    Mr. Kingston. Was it a crisis? I mean, it sounds to me like 
a legitimate concern, but not a crisis. And if it is not a 
crisis, it should go through the State Department regular 
budget.
    Mr. Holum. It is designed for a crisis.
    Mr. Kingston. So it is in anticipation of a crisis. It 
would appear to me that as a regular diplomatic function it 
should come through Commerce, State and Justice. I don't know, 
I mean, I am just asking, but it would appear that--what is the 
reason it doesn't?
    Mr. Holum. Because it is a programmatic response would be 
my answer, and I could probably provide a better answer for the 
record, but we are talking about funding projects here rather 
than funding administrative costs.
    Mr. Kingston. Mr. Chairman? Thank you very much sir. Would 
you like your gavel back?

                                  kedo

    Mr. Callahan [presiding]. I think you have done a great 
job. You can have it for the rest of the day.
    I guess while we are waiting for the rest of them, you go 
ahead and explain. We will give you your opportunity to address 
my concerns about KEDO.
    Mr. Bodner. Thank you, sir. We did discuss this briefly in 
response to other questions, but you made a very important 
point, which is that this is an international effort. This is 
not something that the United States alone should be funding. 
We fully agree with that.
    My understanding is that through fiscal year 1998, 
contributions to KEDO have totaled about $250 million, of which 
the U.S. supplied roughly half, and that others have made 
contributions. You referred to the Japanese. And I understand--
--
    Mr. Callahan. Is that pledged contributions or actual 
contributions?
    Mr. Holum. It is actual.
    Mr. Callahan. If they are putting up all of that money, why 
did you all have to borrow against it?
    Mr. Bodner. In your absence, Mr. Holum observed your 
concern about the borrowing. I know last year in this hearing 
that was a concern. Last year the debt was something like $47, 
$48 million, and at the present time it is something like $22 
million. So while there is a debt still, it has gone down.
    Mr. Callahan. Does 55 include paying off that debt?
    Mr. Holum. Conceivably, but the 55 is roughly the cost for 
the heavy fuel oil for the calendar year.
    Mr. Callahan. So you are going to pay off debt and borrow 
more money?
    Mr. Holum. So our anticipation is that by the end of fiscal 
year 2000--this depends on oil prices. We have benefited from 
the----
    Mr. Callahan. How long do you expect that the United States 
is going to, as a contingency, to provide fuel oil for North 
Korea?
    Mr. Holum. The agreement provides that KEDO and we will 
provide heavy fuel oil until the first light water reactor 
comes on line.
    Mr. Callahan. I understand, but my question was how long 
and not--I know what the KEDO agreement says, which I disagree 
with. How long is the United States going to have to continue 
to provide heavy fuel oil to North Korea?
    Mr. Holum. My judgment would be that this will continue 
until that happens, and the target date is----
    Mr. Callahan. Let me speak real slowly. How long, how many 
years--or maybe you are in a position now, maybe we ought to be 
talking about weeks--how long are we going to have to continue 
this? How long do you think we are going to have to continue?
    Mr. Holum. The heavy fuel oil specifically? Well, at least 
through 2003. But, again----
    Mr. Callahan. What was the original agreement?
    Mr. Holum. I emphasize----
    Mr. Callahan. Do we have a commitment--if they never build 
these plants, do you think that the United States has a 
commitment to provide heavy fuel oil for the next 50 years 
under the agreement?
    Mr. Holum. If the plants are not constructed, then the 
Agreed Framework would be in a lot more trouble than the heavy 
fuel oil, and I don't think that we would be doing it. With 
everything else falling apart around it, which I don't think 
will happen, we wouldn't be out there reflexively delivering 
heavy fuel oil. It has to be in support of an active, alive, 
working agreement. At this stage the agreement--for all the 
threats, and there are a lot of them, it is continuously 
hazardous--is doing what it was supposed to do.
    Mr. Callahan. Were you in on the original negotiations of 
KEDO?
    Mr. Holum. I wasn't specifically involved in negotiations; 
I was involved in the policy process.
    Mr. Bodner. Sir, if I could address the security question 
that Mr. Holum just made. The Agreed Framework currently 
continues to serve our interests. We want it to remain vital. 
Right now there is a processing plant, a reactor, and spent 
fuel at Yongbyon, and we want to make sure that those do not 
start back up. Had we not had an Agreed Framework, and KEDO is 
an integral part of the framework, in addition to having the 
spent fuel that is sitting there now, they would have refueled 
that 5-megawatt reactor. It would have discharged fuel in 1995, 
providing spent fuel for another set of weapons. It would have 
been refueled and discharged again in 1998, providing more 
plutonium for another set of weapons. The 50-megawatt reactor 
would have been completed and discharged fuel in 1998 for a 
significant number of nuclear weapons.
    So, in the absence of the Agreed Framework, North Korea 
right now would have a small, but militarily meaningful nuclear 
weapons arsenal. Particularly in light of the missile 
developments that have taken place, that would have been 
something more than worrisome.
    And so I think that it is not at all unfair to say that the 
Agreed Framework has served our interests, and if it can remain 
viable--and there is an ``if'' to that statement--then it will 
continue to serve our interests. And I think that our position 
is that we don't want to give an excuse to the North Koreans to 
declare the Agreed Framework dead because they could turn 
Yongbyon back on quickly and take the spent fuel that is 
sitting there and turn that into weapons very quickly.
    Mr. Callahan. If they have the money for that technology, 
why can't they buy their own fuel oil?
    Mr. Holum. They can.
    Mr. Callahan. This is foreign aid.
    Mr. Holum. They can, but the agreement provides that it 
will be done this way. The rationale for it is that they shut 
down the plants that were producing electric power, and the 
heavy fuel oil obligation is to replace the power that they 
lost by virtue of giving up those reactors.
    Mr. Callahan. I don't fault the plan. I fault the United 
States being the only country that is having to fork over real 
dollars in order that the plant can go forward. I agree with 
the philosophy and the intent behind the negotiations which we 
were facilitating South Korea and Japan. That is fine. And in 
that process we went to other countries, and they agreed to put 
money in. Now you are telling me they put some of the money in. 
I think for the first few years they didn't put money in. And I 
think you have also been blessed by low crude oil prices. Now 
what is going to happen within the next 6 months when you are 
looking at probably a 30, 40 percent increase in oil?
    Mr. Holum. It is going--the cost of heavy fuel oil can go 
up, there is no question about that; but again, our money is up 
front.
    Mr. Callahan. I mean, does this $55 million include the 
projected increase in the cost of oil?
    Mr. Holum. It is predicated on expectations of what the 
price of oil would be.
    Mr. Callahan. What do you think it will be? I might buy 
some stock. I don't know. You all haven't been able to look too 
much to the future?
    Mr. Holum. I would still sell short, I think.
    Mr. Callahan. Let me go vote, again.
    Ms. Kilpatrick. Let me yield to my Chair. I will follow 
you. I defer.
    Ms. Pelosi. If your schedule will allow, because I am here 
for the duration, such as that may be.
    Ms. Kilpatrick. Don't you have another meeting?

                        military training report

    Ms. Pelosi. On the issue of the responsiveness of the 
military training report to congressional concerns and the 
requirements of the law, why does the report not contain a 
country-by-country justification for training activity? And why 
is all JCET information classified?
    As you know, some of my concerns about the JCET activity 
have been publicly reported in the press, particularly in the 
case of Indonesia. Can you comment on any future plans for JCET 
training, and what is the foreign policy justification for it? 
We thought we were going to see, some of us did anyway, a 
country-by-country justification for it, not just an 
enumeration with four sentences.
    Mr. Bodner. Let me answer the latter part. This was a 
massive effort that we were asked to do in an extremely short 
period of time, and so we did the best we could to be 
responsive, which was to gather as much information and yet get 
it to you before your hearing cycle started.
    Ms. Pelosi. If I just may, one would have thought you would 
have had such a thing ongoing, that you were just adding to as 
you went along. What you are telling me is that it was hither 
and yon, and you had to pull it together?
    Mr. Bodner. We do keep track of these things. They are kept 
track of in different manners, and we had to bring it together 
in a single document, and just the mechanics of having it put 
together in a single database that was compatible was a 
significant effort.
    Ms. Pelosi. While you are getting the report, one of the 
questions is when will it be available on CD-ROM?
    Mr. Bodner. Shortly. This was not a modest effort or 
narrowly defined effort. This was very expansive in terms of 
how we looked at this. We looked at everything that was 
traditionally identified as training, as well as other things 
that Congress was interested in, such as the JCET program, 
which we would not normally put into that security assistance 
bucket. So this was a massive effort, and we provided it as 
quickly as we could in as comprehensive a form as we could.
    The reason the JCET is classified is because we didn't have 
time to go through it and declassify and still get it to you 
before the hearings started. We are declassifying it as quickly 
as we can. We have a different report coming up with similar 
information, and that goes through a different process, and it 
does come up declassified, and I believe that is provided on an 
annual basis and will continue to be provided on an annual 
basis.
    Ms. Pelosi. But you don't have this information on a 
country-by-country basis? Nobody can, say, report on this is 
what we are doing in this country in these different 
categories?
    Mr. Bodner. On the justification quiestion, I will turn to 
Mr. Holum for that.
    Mr. Holum. What we responded to was what we understood to 
be the request to provide the foreign policy justification for 
the programs. Each instance of training under IMET and other 
programs that we fund should be justified at the program level, 
at the training level, in light of those foreign policy 
considerations. So that is what we thought we were asked for.
    Ms. Pelosi. So you don't have--then you decided that----
    Mr. Holum. This does include--but there is, for example, 
depending on the size of the program and the importance and 
sensitivity of the country, in every case involving our 
programs, the mission program plan of the embassy includes the 
determination at that level of what will be done in that 
country that year. And that becomes a part, justified in light 
of the foreign policy objectives that we cited in the report. 
And so it is integrated at the embassy level and very often 
also at the State Department level, the regional level, into a 
program plan for that particular country.
    Ms. Pelosi. But that is what the report would be, a 
justification of the foreign policy along with the spelling out 
of what form the training took place. I find it disappointing 
to have a listing. I mean, we are all familiar with the tactic 
of loading people with information, and I appreciate that this 
is--and I am not putting this in that category--but I am saying 
that I was very disappointed that we got a listing rather than 
a justification with an enumeration of what was happening to 
see what the match was between the two.
    Mr. Holum. Well, what might make sense, and we would be 
happy to cooperate with you on this, is to focus on particular 
countries of concern and look at the mission program plan.

                               indonesia

    Ms. Pelosi. Let's talk about Indonesia. Much of the JCET 
activity has been publicly reported in the press, particularly 
in the case of Indonesia. Can you comment on future plans for 
JCET planning? I would like to know the foreign policy 
justifications. What role does it serve? Is it still going on 
there? How does the extent that the U.S. has a role in 
intelligence forces and the army square with the killings of 
civilians during disturbances? And to what extent should 
Congress be involved in decisions to deploy troops in a 
training capacity for JCET activities?
    I wanted to put it all out there so you could answer it not 
question by question, but in a more comprehensive way. Some of 
our unhappiness about this whole military training is related 
to quotes--I don't know whether they are true or not, and we 
would hope that your report would dispel them--from the 
military that they really did not have any intention of 
honoring the intent of Congress on the training; that they 
would go around Congress' intent on the training.
    Mr. Bodner. Let me address this if I could, because that is 
a very important point. I want to assure you that we very 
sincerely tried to be as responsive as possible on pulling this 
together, and this was a massive job in a very short period of 
time.
    With regard to the question that you just posed about 
whether there is some attempt somehow to evade the Congress, I 
would like to say that out of all the activities listed here, I 
believe that something like 90 or 95 percent of them, in fact, 
fall under the traditional security assistance which passes 
through this subcommittee--as opposed to other things, such as 
1004 activities. But we do have that authority granted by the 
Congress for the 1004 activities and similar activities.
    Ms. Pelosi. That still doesn't give us the justification 
for why.
    Mr. Holum. As I understand it, the JCET program in 
Indonesia was canceled in May of 1998, and it hasn't been 
resumed there. So for 1999, our military training with the 
Indonesian military is limited to small programs of 
humanitarian, engineering and medical activities. There is also 
a mobile team providing training in human rights awareness and 
civil-military relations. The question of restoring--of 
proposing--and that is under E-IMET--the question of restoring 
full IMET to Indonesia is still under discussion. It hasn't 
been resolved.
    Ms. Pelosi. Mr. Secretary, who is responsible for 
determining that a given military activity in a given country 
fits into our foreign policy toward that country?
    Mr. Holum. Going back to what I was saying earlier, I think 
the primary responsibility is for the mission in the country, 
for the ambassador in the country to make a determination that 
that activity is consistent with our foreign policy goals in 
the country, whether it will become a part of the mission 
program plan or, if it is a JCET or CINC's sort of program, it 
will be coordinated at a minimum with the embassy, which is the 
repository of our policy toward that country.
    Ms. Pelosi. So the CINC and the ambassador.
    Mr. Bodner. The country teams are actively engaged in 
helping to identify the relevant activities, including JCET 
activities, and they are the ones who provide, for example, the 
human rights report that comes back to the Department before 
activities are carried out, and that is appropriate.
    Mr. Holum. That is a red light. In terms of the green 
light, in terms of the decision to proceed, it is part of a 
mission program plan that would be developed at the embassy 
level.
    Mr. Callahan. Ms. Kilpatrick.
    Ms. Kilpatrick. Thank you, Mr. Chairman and Ranking Member.
    And I think following up on my Ranking Member's question, 
as a new member of the subcommittee, I am kind of concerned in 
looking at a $6 billion budget that is before me, a little over 
6 billion. Through my calculations, I see less than $120,000 
for the largest continent, most populous in the world. That 
kind of bothers me a bit.
    And I guess my first question--and that, I think, is what 
my Ranking Member was asking--is what determines who gets the 
money, what kind of things? I think you started talking about 
the ambassador and so forth. Is there a formula, or is it all 
politics?

                                 africa

    Mr. Holum. No, it is certainly politics in the sense of our 
relationships with the various countries and the identification 
of needs through the embassy. The process of building the 
budget is regretfully largely a process of what the Chairman 
was referring to before of setting priorities, identifying 
urgent needs, identifying cases where funds can be productively 
used for specific purposes, including a number of initiatives 
in Africa, a crisis response initiative and a number of others.
    But the overall process is one in which all of the regional 
and functional considerations make their case, and ultimately 
the Department of State arrives at a position, and then we go 
to the ultimate arbiter for the administration, the Office of 
Management and Budget, who correlates everything.
    Ms. Kilpatrick. I want the record to reflect that I am not 
trying to take any funds from anyone or any part of the world 
that is receiving them.
    Mr. Bodner. Could I comment on your question, because we at 
DOD have a very strong interest in working with African 
countries in a variety of ways.
    Our FMF proposal for this year proposes $10 million for FMF 
for the African Crisis Response Initiative and for East African 
regional activities. And the idea there is to work with 
countries to help build up their capabilities so that they can 
become more self-sufficient as well as able to work with us 
effectively. For the IMET program we are proposing $8.5 million 
for training and education for military and civilian personnel 
from African militaries and defense ministries in the United 
States.
    Secretary Cohen and I were just in South Africa, and we 
have an extremely extensive program of cooperation with the 
South African Defense Ministry and military. We have conducted 
a great deal of collaborative work with them on equal 
opportunity, for example, especially with Major General Jackie 
Sedibe who is in charge of EEO there. It is an extremely 
important issue for their armed forces, because they integrated 
seven different armed groups into their military at the time of 
changing governments, and now they are in the process of 
downsizing, and you can imagine the difficulties that are 
involved in that as they choose who to discharge and reforming 
promotion policies.
    Ms. Kilpatrick. I appreciate the work that you are doing. 
Can you prepare for me something addressing the African 
continent and what you are doing and what you plan to do with 
some projections?
    Mr. Bodner. Absolutely.
    Ms. Kilpatrick. The Chairman in his opening remarks 
mentioned Angola and the new Republic of Congo and Eritrea. I 
was in Eritrea in 1997, when they were at peace for that period 
of time they have now started fighting again. I am concerned as 
to how we could help. And again, I don't want to take funds. I 
know strategically in terms of the Middle East, where I have 
also visited, as well as the conflict in Kosovo and the former 
Russian republics, there are strategic military weapons of mass 
destruction, and those kinds of things, which we have to 
protect ourselves from.
    I am kind of surprised, Mr. Chairman, that our budget is so 
small with what is happening in the world and the role that the 
U.S. plays. I know the small foreign operations budget is a 
matter of caps, politics, what is available and all of that. As 
we move to this new century, security in the world, something 
that we all work to achieve so we all live in a safe and secure 
environment. This is a global economy now. In a few clicks of 
the computer we can be anywhere. We must ensure the security of 
our troops, as well as their families, and our children.
    So you have an awesome responsibility. I do recognize that. 
I would like to work closely with you to see how I can help to 
further financing as well as peace.
    Mr. Bodner. I would again say that DOD certainly has a 
strong interest. We have had to have military forces engage in 
Africa repeatedly in the last couple of years to deal with 
problems, and what we want to do is to have a long-range 
strategy to prevent problems and to buildup capabilities and 
professionalism so that problems don't arise, rather than 
trying to step in and stanch problems after they arise. And 
this is, again, an ongoing effort.
    We are hosting a meeting among the South African Defense 
Ministry leadership meeting in the United States a week after 
next, and it is a sign that we are absolutely committed to 
working with colleagues in Africa. We are proposing the restart 
of our IMET program in Nigeria, $425,000 this year. We very 
much would appreciate your support for that.
    Ms. Kilpatrick. I will look forward to working with you.
    I noticed on the list that staff gave me, when you 
discussed sub-Saharan countries, there were several northern 
countries in that list. I believe there are 40 of them. I don't 
know how many, but I did notice Nigeria, which I would consider 
not sub-Saharan; that is, not to be included in the sub-Saharan 
list that was given me. How do you determine what is sub-
Saharan? Obviously it is not below the Sahara Desert. Is there 
some other definition?
    Mr. Holum. I don't know which list you are referring to.
    Mr. Bodner. I have a list right here, and these were the 
numbers that I was referring to.
    Mr. Holum. Nigeria is on here.
    Ms. Kilpatrick. So Morocco, Egypt--those would not be sub-
Saharan countries.
    Mr. Bodner. That is correct.
    Ms. Kilpatrick. Anything more southern than those, like 
Nigeria, which is west and southern, that is a sub-Saharan 
country. So it is Tunisia, Morocco, Namibia; 90 percent of the 
continent would be. When we say sub-Saharan, I think most 
people think below the Sahara Desert, but it is not that. It is 
also some northern countries as well.
    Mr. Holum. I can add on the development side, one of the 
problems with considering the budget in segments is that we are 
doing the security assistance portion, and the total in the 150 
budget accounts for Africa is a billion dollars, including 
assistance.
    What we are focusing on here is funding that is 
specifically related to security concerns, and there are a 
number of extremely important initiatives. The one that I think 
has been most visible and is proving successful and requires 
continued investment is the Africa Crisis Response Initiative, 
which is basically a program to do a big part of what Jim 
Bodner said, to avoid the requirement for troop deployments by 
generating an indigenous trained capability for crisis response 
in African countries. And it is already paying dividends. It is 
not a large investment of funds, but it involves dedicating not 
full-time, not a standing force, but dedicating trained 
personnel, equipping them with communications capabilities and 
so forth, to respond to crises in the region.
    Ms. Kilpatrick. Is it within your jurisdictional 
responsibility, to put the various pools of money together and 
show me total dollars in the programs? I would like to work 
with you.
    Mr. Holum. Absolutely.
    Mr. Bodner. Absolutely.
    Mr. Callahan. Let me respond to your concerns about sub-
Saharan and the distribution of the money. I think this 
committee does it exactly right by giving as much latitude to 
the administration as we possibly can.
    For example, we give $600 million to the administration 
each year for child survival to take care of children. If they 
want to spend it all in sub-Saharan Africa, they can. And they 
do--that is not in here, but they do spend a great percentage 
of it there, but we don't say, spend it here, spend it there.
    As you well know, we will be allocated maybe $12 billion if 
we are fortunate, maybe $10 billion. So if it were left up to 
me, I would write the State Department a check for $12 billion 
and say, run foreign policy, but it is not left up to me, and 
we have to do some things that we do because we have to 
appropriate the money for Israel. That is a political reality.
    Ms. Kilpatrick. I understand. It is a very important part 
of the world.
    Mr. Callahan. We have to appropriate the money to Egypt, 
because that is sort of a political reality. So it leaves us 
with very little money left when you compare the entire budget. 
But we try to give the administration as much flexibility as we 
can.
    But now comes the problem that I was talking about with 
KEDO. They are here and telling us they want another 40 percent 
increase, $20 million increase, increasing it from about $30 
million to $55 million, or $25 million, to buy some oil for 
North Korea, who is developing a nuclear capacity probably, at 
least a missile capacity, to attack the United States of 
America. And they are telling us to earmark money for that.
    Then they tell us to earmark Israel. Then they come and say 
earmark Egypt. And then they come and say, also, earmark the 
interest, create an interest-bearing account, because you are 
not spending the Egyptian money fast enough. They tell us all 
of these things which probably comes to $20 billion if you look 
at it, which we don't have. And then they go out and complain 
about this committee and this Congress not giving them what 
they asked for, and if there is a disaster and we don't give 
them the $55 million for North Korea and they attack Japan, 
they are going to blame it on us and say, well, if Congress had 
given us the $55 million, we could have precluded this.
    So it is a difficult committee that you are serving on. 
When we try to do the responsible thing by giving the 
administration the flexibility to utilize what limited 
resources we have, it puts us in a bad position. But we do try 
to give them as much flexibility as we can.
    With respect to the military training in Africa, I agree 
that we should, because the reason we are training military 
forces in Africa is to hopefully preclude the necessity of 
sending our own people there someday. So it is important. But I 
don't know what the solution is. We give them as much 
flexibility as we can. We don't say, spend this money here, 
except for a few countries. In fact this committee doesn't 
hardly earmark any money except what we are politically 
required to do because of the political situation with respect 
to earmarks to Israel and to Egypt and to, admittedly, Ireland. 
But then I am Irish.
    Ms. Kilpatrick. I support that, sir. I support you and the 
leadership. I married that name. That is right. I do support 
you, Mr. Chairman. I appreciate your leadership on this, and I 
know there is not enough money to go around, and we must be 
spending it wisely and making it work.
    My concern and interest in Africa and around the world is 
that we do make countries stable so that economics can grow, so 
they can take care of themselves, and grow their own food, and 
take care of their children. It ripples on. I appreciate your 
commitment.
    Mr. Holum. Mr. Chairman, at the risk of getting us back 
into KEDO, may I correct a statement I made earlier?
    My written statement has it correct that of the $55 
million, some portion of that is for debt reduction. Those are 
three things: Reduction of the debt, the next year's purchase 
of heavy fuel oil, and our share of the administrative costs. 
So I didn't want to leave it confused on the record.
    Mr. Callahan. Are you finished Ms. Pelosi?
    Ms. Pelosi. No.

                                 bosnia

    Mr. Callahan. Let me just get a brief question answered. 
Let's talk briefly about Bosnia and the removal of the 
President, you know, which reeks of at least philosophical 
understandings of what democracy is all about, that the high 
representative in Bosnia just ordered the removal of the 
President, who was freely elected, from office.
    Now, I mean, what are we going to do about that? Is that 
your understanding of what we thought Bosnia would do with 
respect to moving towards democracy or--what are we going to do 
about that, nothing?
    Mr. Bodner. Perhaps I could offer a brief response, and Mr. 
Holum might add to it.
    My understanding is that the High Representative acted 
under the authority that is contained in the Dayton agreements 
and that the Peace Implementation Council has affirmed several 
times over the last couple of years. He did so because the 
behavior of President Poplasen was inconsistent with the Dayton 
agreements, threatened the Dayton agreements, and indeed in the 
letter that Poplason wrote to the High Rep, implicitly 
threatened NATO forces.
    Mr. Callahan. What did he do?
    Mr. Bodner. In the opinion of the High Rep, President 
Poplasen is attempting to remove the Prime Minister, who is 
also put in office through democratic means, and doing so in a 
manner that was inconsistent with the Constitution and, 
underlying that, inconsistent with the Dayton agreement. And as 
I say, President Poplasen expressed implicitly in this 
communication with the High Rep a threat to NATO forces. And I 
think you can appreciate the fact that we don't countenance 
that very well.
    Mr. Callahan. Well, let me ask you the same question. You 
answer it this time and listen very closely: How long are our 
troops going to be in Bosnia do you think? We have already 
passed that 1-year projection that we were told, the Congress 
was told. How long are we going to be in Bosnia?
    Mr. Bodner. I think we have learned the lesson to focus on 
the end state and not an end date.
    Mr. Callahan. The question is, once again: How long are we 
going to be in Bosnia? Months? Years? Just all I need is one 
line. How long do you think we are going to be in Bosnia?
    Mr. Bodner. The President has identified several 
benchmarks, and I think it will take a period that will extend 
at least another year there. I would say that we have drawn 
down our forces significantly. At one time they were in excess 
of 20,000. Last year----
    Mr. Callahan. I appreciate all of that. Listen, next week 
is Saint Patrick's Day, and I have been watching all of these 
television specials where these so talented Irish people are 
doing this beautiful dance. And you are such an excellent 
example of dancing, maybe you could teach me to do that.
    I understand you are not going to answer that because you 
don't know, and none of us do.
    You mentioned--your request there mentioned that we fund 
the Hurricane Mitch situation. We are going to begin doing that 
at 1 o'clock today in full committee. I don't know what we are 
going to do about--I don't think you ever answered, but we 
don't have a whole lot of time, just briefly, what about the 
pipeline interest-bearing account for Egypt? What is your 
justification for that? Is it fairness because Israel gets 
theirs in advance or what?
    Mr. Holum. That is certainly part of it. As the Wye 
supplemental proceeds----

                    israel and egypt funding parity

    Mr. Callahan. There is no Wye supplemental.
    Mr. Holum. Well, as the Wye settlement proceeds, what we 
have tried to do is through the Department of State and the 
Department of Defense work on reviewing ways to accommodate 
Egypt in light of the proposed reductions in economic support 
funds and the increase in foreign military financing for other 
countries in the region, Israel for example. And what this will 
do is help maintain some funding parity between our partners in 
the region.
    We set the account at $470 million, because $470 million is 
the amount already required to be deposited and is deposited 
should termination of the Egyptian foreign military sales 
program take place, and that has to be on hand to compensate 
for the sales.
    As you probably know, the estimated yearly cost of this 
would be $24 million. But that is the basic rationale for it.
    Mr. Callahan. This latest announcement that Secretary Cohen 
is announcing today or yesterday about the military purchases 
for Egypt, does that pretty well deplete, or is that--does that 
come out of FMF financing?
    Mr. Bodner. That is continuation of the existing programs.
    Mr. Callahan. This is the new press release that came out 
yesterday or today.
    Mr. Bodner. As I say, yes, he was in Egypt. They talked 
about their ongoing programs.
    Mr. Callahan. I mean, won't that deplete the obligation of 
that, deplete most of the pipeline monies for Egypt?
    Mr. Bodner. Well, those are planned programs already 
programmed in there, so it is a continuation of existing 
programs, and the budget submission takes into account those 
activities.
    Mr. Callahan. You all think we ought to give Israel that 
money on October 1st of each year. Is that good foreign policy? 
Does that help you out?
    Mr. Holum. Yes.
    Mr. Callahan. I am not making light of what you are doing, 
it is just these things seem sometimes strange to me. We are 
not going to--or at least I am not going to agree to the 
Egyptian pipeline money. I told President Mubarak this as well 
as the Ambassador. And you all you talk about parity, equal 
treatment of countries in the region. You must keep in mind 
that we forgave a huge debt to Egypt during the Desert Storm 
crisis and that there was no parity suggested then, and that 
the very fact that we forgave that huge debt, I think it was $7 
billion, I think that if you are looking at fairness, then you 
ought to include everything, not just one aspect of it.
    And the fairness of the advanced payment to Israel opposed 
to an interest-bearing account for fairness I think is more 
than evenly offset by the forgiveness of debt that we gave to 
Egypt during the Persian Gulf crisis. So that is not a good--
and I have expressed that to Mr. Mubarak, and I don't think we 
are going to consider it anyway. Anyway, we don't need to talk 
about that anymore.
    So now we will go back to Ms. Pelosi.
    Ms. Pelosi. Thank you very much, Mr. Chairman.
    Mr. Chairman, I was listening with interest to your 
comments, as well as your comment to our colleague Ms. 
Kilpatrick, and isn't she a wonderful addition to our 
committee? Very attentive.
    Mr. Callahan. I didn't know she was Irish.
    Ms. Pelosi. She wants the statements of the witnesses in 
advance so that she will have them read before, so I want the 
administration to know that our new Members share in our 
concern about getting statements early. No reflection on the 
gentlemen who are here right now.
    Actually, you and I agree about the latitude that should be 
given to the administration with the dollars that are allocated 
for them. We agree because we agree they should have the 
latitude, except where we have areas of disagreement. You 
disagree on Korea, Haiti, Bosnia, possibly Egypt, et cetera, 
and I disagree on other areas.
    Mr. Callahan. I voice my disagreement, but I have given 
them, for example, every penny they have asked for. And I have 
given you almost every penny you have asked for.

                                  imet

    Ms. Pelosi. And every penny I have ever gotten. But the 
point is that we do have some--I, for one, as a matter of 
conscience and constituency, will not give latitude to an 
administration--and I am not saying that this administration, 
but in the ongoing--that has used IMET funding to bolster 
armies which have violated the rights of people in those 
countries, whether it is Indonesia, Guatemala, and there are 
others.
    I was interested that President Clinton in his statement in 
Guatemala said, ``For the United States, it is important that I 
state clearly that support for military forces and intelligence 
units which engaged in violence and widespread oppression was 
wrong and the United States must not repeat that mistake.'' And 
I completely associate myself with that remark and will be ever 
vigilant when the military decides to circumvent the intent of 
Congress to do training when they know that there is a 
prohibition directly on that kind of military training; witness 
Indonesia, repression in East Timor, attacks on noncombatants 
there. So that is one point I want to make.

                               landmines

    Another area which I don't really need an answer to, in 
fact there is not time for, is in the area of land mines. Mr. 
Holum--and by the way, Mr. Holum, your position as Acting Under 
Secretary, and I hope Under Secretary of State for Arms Control 
and International Security Affairs, is a very, very important 
one, per se, but its importance is not lost on many of us in 
the Congress, and we are pinning our hopes on you because 
disarmament arms control issues are at the end of the day the 
most important issues. Everything else we can accommodate or 
put off or fight longer for, but proliferation of weapons and 
our own buildups and those of our allies in my view puts our 
best brains to our most destructive means, and I think our 
resources should go someplace else.
    Of course we have to have a strong national defense, but I 
was disappointed in your characterization--I mean, I thought it 
was overly optimistic, shall we say, of your comment--I have in 
my notes, ``The primary objective of the President's Demining 
2010 initiative is to accelerate international demining 
operations and to stimulate substantially and increase 
resources internationally, both from other governments and the 
private sector.''
    I think that those words would mean a lot more if the U.S. 
were part of the Canadian initiative, the Canadian Convention 
on Demining.

                         school of the americas

    I want to move on, though, to a couple of questions about 
the School of the Americas, which I have shared with many of my 
colleagues in the Congress. In the aftermath of discovery of 
manuals used at schools, which are familiar to us, the DOD 
committed to improve the oversight of the curriculum by issuing 
a directive on training programs meeting human rights 
standards. Has that directive been issued? Could you provide us 
a copy of it? What steps have been taken to assure that all 
curriculum developers and instructors are aware of the 
directive? Is there any oversight beyond that exercised by the 
board of advisors on the School of the Americas' curriculum?
    Mr. Bodner. Yes indeed, beyond that the Secretary of 
Defense is required to certify each year as to the content of 
the program there. He recently submitted yet another annual 
certification, and in it I believe he stated not only do the 
courses and curricula at the School of the Americas meet the 
standards that we apply at our own military education programs, 
but they exceed them when it comes to questions of human rights 
curriculum and international and humanitarian curriculum.
    Ms. Pelosi. In that kind of certification, then, you must 
have--do you have some documentation or assessment of the 
performance of the School of the Americas' graduates in 1997 
and 1998? Are any of these graduates implicated in human rights 
abuses? What are they, if they have? And how many students--
describe how many students are enrolled in human rights 
training, the training course, in 1999, and describe the 
planning to offer it in 1999 as well.
    Mr. Bodner. With regard to how many students were enrolled 
in a particular course.
    Ms. Pelosi. Train the trainer.
    Mr. Bodner. We could probably provide it. I have been told 
it is in the report here.
    Ms. Pelosi. I know. I say, it is in my files. You go find 
it.
    Mr. Bodner. We will identify the data for you. Let me 
also----
    Ms. Pelosi. I am sure you will be able to provide that for 
us directly.
    [The information follows:]

    In fiscal year 1998, the U.S. Army School of the Americas 
did not have any students who took the Human Rights Train the 
Trainer Qualification course. This same course has been made 
available to Latin American countries for fiscal year 1999, and 
there are currently no students scheduled for enrollment at 
this time.

    Mr. Bodner. Let me also add, as Secretary Holum has said, 
in the Western Hemisphere we now have a democratic hemisphere. 
We have governments of legitimately elected, credible 
leadership; democratically elected, committed to reform in most 
cases. And it is those leaders, reform-minded people, who come 
to us and ask us to engage their militaries.
    Ms. Pelosi. I was really asking a more direct question 
about whether any of the graduates of the School of the 
Americas have been implicated in human rights violations in 
1997 and 1998, those graduates? Do you know?
    Mr. Bodner. I don't have the information right here to give 
you on that.
    Ms. Pelosi. So the certification is based on the 
curriculum, but not the performance of the graduates; is that 
correct?

                         black hawk helicopters

    Mr. Bodner. Certification attests to what the training 
program and the education program is at the school.
    Ms. Pelosi. So you don't have any results about the 
improvement? We have had some pretty unsavory characters 
graduate from the School of the Americas, and I am assuming 
from the certification there has been some improvement in that. 
We have been more discriminating in terms of who has been 
allowed to go there, and the record of recent graduates is an 
improved one. Would that certification--am I inferring 
incorrectly from the certification?
    Mr. Bodner. The certification, the content of which is 
dictated by law, addresses what the training activities and the 
education activities are.
    Ms. Pelosi. But you have no record of the performance of 
the graduates?
    Mr. Bodner. We don't individually track every person who 
goes through one of our training programs.
    Ms. Pelosi. But you don't know of any notorious violation 
of human rights?
    Mr. Bodner. I am not aware of any notorious violators as 
you have described.
    Mr. Holum. We do vet.
    Mr. Bodner. Certainly, before people come to the school, of 
course, we do vet. And many of these individuals----
    Ms. Pelosi. The Chairman is appropriately admonishing me 
about the time. But I want to get into--and then I will submit 
the rest of my questions for the record, and unfortunately some 
of my colleagues share some of these concerns, and they are not 
here to ask them. The Import-Export Bank recently funded the 
sale of armored personnel carriers to Turkey. One-time, 10-
year-old authorities were recently used to fund the sale of 50 
Black Hawk helicopters to Turkey. Some American companies are 
attempting to get the Eximbank approval to use the same 10-year 
authority to fund the sale of 50 attack helicopters to Turkey 
as part of a larger sale.
    What is your position on the use of this authority? Do you 
think U.S. companies will be allowed to make this sale to 
Turkey given your promises that such a sale would be contingent 
on meeting certain human rights conditions?
    Mr. Holum. You are talking about the attack helicopters?
    Ms. Pelosi. Yes.
    Mr. Holum. Well, the issue hasn't explicitly arisen now. As 
you know, Prime Minister Yilmaz discussed this issue with 
President Clinton, discussed this issue with him in December of 
1997, and he made commitments to concrete human rights reforms. 
And when we consulted with the Congress prior to issuing the 
marketing license for the attack helicopters, we made clear 
that if a U.S. company wins the competition, our sale will be 
based on all the elements of the arms export control policy, 
which includes an evaluation of Turkey's progress on human 
rights.
    There have been some positive steps, including the 
submission of legislation that we have called for increasing 
the accountability of civil servants and easing restrictions on 
free speech. Their attack helicopter competition is still going 
on. We don't know if a U.S. company will be chosen, but if a 
U.S. company is chosen, the decision on arms sales will be 
based on our arms export control policy, including our 
expectations on the human rights side.
    Mr. Bodner. May I just add that regardless of the 
financing, the sale has to go through the licensing process as 
Mr. Holum has described.

                        ex-im funding authority

    Ms. Pelosi. But my question was do you--you answered part 
of my question. The other part of my question, what is your 
position on the use of this authority, this 10-year-old 
authority, to use Exim? See, I don't think that the American 
people think that we have established the Eximbank to 
facilitate arms sales, so some of us have a very particular 
view about that, and that increases for the--Eximbank money is 
very scarce around here, as you know, and the opportunity costs 
are only one consideration. If we are spending it here, then we 
are not able to provide financing and et cetera for other 
exports from the U.S. And so many of us would oppose Exim going 
down this path. Now they are using this old authority in these 
cases, and I am asking you what your position is on the Exim 
using this old authority for the attack helicopters.
    Mr. Holum. I will have to give you a response for the 
record because I have been intensely involved in that subject, 
but it has been several years since I focused aggressively on 
it. I will get back to you.
    [The information follows:]

                      export-import bank financing

    The Administration will not use this authority to finance 
the sale of attack helicopters to Turkey. This authority was 
established in 1990 to provide financing for the export of 
utility helicopters to Turkey and Greece. This facility allows 
for deliveries up until June 2001, or until the Ex-Im credits 
are used up.
    A contract for the sale of 150 Sikorsky Black Hawk Utility 
helicopters was signed in 1922. Under this contract, 53 
helicopters have been delivered. Effortrs are now underway to 
use this authority to execute the sale of 50 Black Hawk 
helicopters to Turkey. Since these 50 helicopters are within 
the scope of the original authorization, this authority can be 
used for the sale of these additional utility helicopters.
    Financing for attack helicopters is not within the terms of 
this facility. Turkey's attack helicopter competition of still 
going on, and we do not yet know if a U.S. company will be 
chosen. Two U.S. companies, Bell/Textron and Boeing, are in the 
running. If a U.S. company wins the competition, our sale 
approval would be based on our arms export control policy, 
which will include an evaluation of Turkey's progress on 
improving human rights in its country.

    Mr. Holum. As a general proposition there are two 
questions. One is should Eximbank authority be used for 
exporting military equipment. I personally think that once we 
make a determination that a military export is in our national 
security interest, and that should be the basis for making the 
judgment, not out of the relationship, but out of the 
seriousness of the security interest, then we should advocate 
it. Whether Export-Import Bank financing should be available 
depends on a lot of factors including the one you cited of 
opportunity costs.
    Ms. Pelosi. Or us becoming the arms salesmen of the world 
and then saying to other countries that you shouldn't do this, 
and we are financing it. And the free market system--all of 
these people who advocate the free market system, it is, see, 
they can't do anything without Uncle Sam holding their hand.
    Mr. Holum. Part of the--some of the helicopter transactions 
here are not military helicopters. They are unarmed.
    Ms. Pelosi. Would you call the attack helicopter a 
nonmilitary?
    Mr. Holum. No, that is a misnomer.
    Mr. Callahan. Let me answer that my understanding of part 
of that was that authorization was given to Eximbank by this 
Congress at the insistence of Senator Dodd 10 years ago, and 
this is fulfilling the commitment that his committee under the 
direction of Mr. Obey--that Exim is operating under the 
authority granted then.
    Ms. Pelosi. Very old. You are right, Mr. Chairman.
    Mr. Callahan. And also there is some question as to whether 
or not some of the personnel carriers are really for military 
activities. I think they have some other agencies within the 
Turkish Government that had requested the personnel carriers, 
but they are not defense-type people. They are more policemen.
    Ms. Pelosi. Thank you, Mr. Chairman. Thank you, gentlemen.

                                  kedo

    Mr. Callahan. Thank you, gentlemen. I appreciate you for 
coming. I am sorry to have made light of some of the concerns I 
have, but I think you know where I am coming from. We are going 
to be as generous as we can under the circumstances. We have to 
explain these questions when they come to the floor. And even 
though I disagree, for example, with KEDO, when it comes to the 
floor, I have to wind up defending it, and, therefore, I have 
got to have some answers to these things that no doubt will 
surface on the floor of the House and during the process. So it 
is important that you all explain to us. I don't know if we are 
going to be able to come up with all the money for anything, 
but KEDO specifically, we will do the best we can. And we thank 
you very much for being here.
    [Questions and answers for the record follow:]
                  Submitted to the Department of State
        Questions for the Record Submitted by Chairman Callahan
    Question. Mr. Holum, the Administration's budget request for FY 
2000 includes $5,000,000 from the FMF account which, according to the 
State Department's congressional presentation document, is to ``bolster 
the capabilities of East African states (Eritrea, Ethiopia and Uganda) 
. . .'' through its ``Front Line States'' initiative.
    Please provide a breakdown of how much funding will be made 
available to each nation in fiscal year 2000.
    Answer. $5 million has been requested for FY 2000, but has not yet 
been allocated to any of the three `Front Lines States' (FLS)--
Ethiopia, Eritrea, and Uganda. Allocations among the three 
participating nations cannot yet be made, since our request is pending 
before Congress and we have suspended FLS assistance to Eritera, 
Ethiopia, and Uganda. Allocations to Ethiopia and Eritrea may later be 
made if a peace settlement is reached.
    Question. Given that Eritrea and Ethiopia have spent much of the 
past year engaged in military conflict with one another, how does the 
Administration justify providing military aid to either nation in 
fiscal year 2000?
    Answer. The Administration will not approve additional military 
assistance to either nation as long as fighting continues, except for 
limited professional military education conducted in the United States. 
Our request for military cooperation funds for FY2000 presumes that a 
peaceful resolution to the conflict will be found, which will permit us 
to renew the effective military-to-military relationships that existed 
with both countries prior to the outbreak of the border conflict.
    Question. What steps has the Administration taken to ensure that 
U.S. military hardware is not used to further the tensions between 
these two nations?
    Answer. The Administration has not and will not approve licenses 
for sale or transfer of military equipment to either country that would 
further their pursuit of the conflict, nor will the Administration 
approve the allocation of any assistance funds for military use. This 
policy will remain in effect until hostilities have definitively ended.
    Question. What estimates are available to the Administration about 
the financial costs to Eritrea and Ethiopia from this war?
    Answer. Both governments have kept arms purchases secret, and have 
purchased a variety of military equipment and materiel from a range of 
suppliers. Unclassified reports note that costly, sophisticated 
equipment, including high-performance aircraft and artillery, have been 
acquired by both countries.
    Question. For Fiscal Year 1999, the Administration has notified 
Congress through its section 653(a) process that it intends to provide 
$5,000,000 in FMF to these ``Front Line States''. What will these funds 
be used for? How much funding will be provided to each country?
    Answer. If hostilities cease, Front Line States funds will support 
procurement of non-lethal military supplies and equipment for Eritrea, 
Ethiopia, and Uganda, such as boots, radios, and individual clothing 
and equipment. No funds have yet been allocated, since our request is 
still pending before Congress. Some funds may also be used for storage 
of two C-130 aircraft acquired by Ethiopia prior to the outbreak of 
hostilities and not yet delivered to it, as well as storage of spare 
parts procured for the C-130s.
    Question. Does the Administration have any information that U.S. 
equipment, made available in the past through the FMF program or the 
African Crisis Response Initiative, was used during the hostilities 
during the past year?
    Answer. All equipment provided to Uganda is non-lethal. However, we 
have no information that any equipment provided to Uganda under the 
``Front Line States'' (FLS) initiative or the African Crisis Response 
Initiative (ACRI) has been used in the conflict in the Democratic 
Republic of the Congo.
    Neither Eritrea nor Ethiopia has received equipment under ACRI. 
Equipment purchased under FLS is limited to non-lethal items such as 
radios, individual clothing and equipment, and repair parts. Repair 
parts accompanying the two C-130 aircraft that were delivered to 
Ethiopia prior to the beginning of the border conflict with Eritrea may 
have been used in support of the Ethiopian Army. However, we have no 
information that any other FLS or FMF equipment provided to either 
Eritrea or Ethiopia has been used in the conflict.
    Question. Mr. Holum, the Administration's budget request for FY 
2000 includes funding for IMET programs for a number of governments--
Eritrea, Ethiopia, Uganda, Rwanda, Congo, Zimbabwe, and Angola--that 
have been involved in regional conflict during the past year.
    What is the justification for IMET training for governments which 
are engaged in conflict?
    Answer. The United States continues to play an active role to help 
prevent and resolve African conflicts. Good governance and sustained 
economic development cannot thrive in an environment plagued by 
recurring armed conflict. This premise remains true as we face the 
current conflicts.
    In the past, we have been quick to sever all military-to-military 
engagement with countries at the outset of a conflict. This frequently 
has had the undesired effect of reducing our influence with governments 
with which we are trying to negotiate for the cessation of hostilities. 
Often this knee-jerk termination of IMET and other military contact 
hinders our ability to promote peace at a time we need it the most. 
Once severed, these ties and the mutual confidence we have built 
through IMET and other programs are very difficult to reestablish.
    Because of our strong opposition to conflict situations, we cannot 
continue with ``business as usual'' with these countries, and yet, we 
do not want to cease all military contacts. Now, we are more likely to 
reduce our military contacts with countries involved with conflicts, 
while not completely severing the relationship. For example, on a case-
by-case basis, we might reduce our military engagement in a given 
country by canceling scheduled exercises and/or denying export licenses 
for some items, while retaining an IMET program for courses conducted 
in the United States.
    Examples of actions we have taken this year because of regional 
conflicts include the canceling of scheduled exercises in Rwanda, 
Ethiopia, and Eritrea, the postponement of Africa Crisis Response 
Initiative (ACRI0 training in Ethiopia and Uganda, and the denial of 
several export license requests for military items to Uganda, Eritrea 
and Ethiopia, while allowing IMET training to continue in the United 
States for these countries.
    Retaining IET in this manner allows us to maintain our ability to 
positively influence human rights, ethical conduct, civil control of 
the armed forces, and professional military values in these countries. 
These are important democratic attributes that we cannot support by 
cutting training in precisely these same areas.
    For these reasons, and in anticipation of success in our bilateral 
and international mediation efforts in the ongoing African disputes, we 
have requested IMET funding for some of these countries in crisis in FY 
2000.
    Question. Will these IMET funds be used to train or educate 
military officers directly involved these conflicts?
    Answer. Although, in future years, it is possible that some of the 
officers involved in these conflicts may participate in IMET training, 
each student will be screened as required under current Congressional 
mandate to ensure they are not participating in gross human rights 
violations. These screening procedures for IMET students are already in 
place and operating in our embassies abroad.
    Question. Mr. Holum, the Administration's budget request for FY 
2000 includes $26,500,000 from the Economic Support Fund for an Asia 
regional financial crisis program. However, congressional presentation 
documents provided to the Committee give very little detail about how 
these funds will be spent.
    Please provide the Committee with additional justification for this 
program, including which countries will be recipients and what types of 
programs will be implemented.
    Which U.S. government agency will administer this program?
    Answer. The Accelerated Economic Recovery in Asia (AERA) Initiative 
is designed to help the Asian reigon recover from its protracted 
economic crisis by addressing key weaknesses in the economic, 
governance, and social systems of three crucial countries; Thailand, 
Indonesia, and the Philippines. The crisis has increased Asian 
receptiveness to reforms the U.S. has long encouraged. As these reforms 
are implemented, the overall business climate will be improved to the 
benefit of all commercial activities, including those of U.S. firms.
    The initiative will achieve its objective by restarting bank and 
business activity, improving transparency and accountability in banks, 
businesses and governments, and improving the targeting, coverage and 
availability of social programs for vulnerable populations.
    Based on country-specific analyses, AERA will support the following 
types of activities in FY 2000 that represent immediate needs and 
complement existing bilateral and multilateral donor programs.
    Provide assistance and training to improve bankers' skills in risk 
assessment and management and credit analysis;
    Provide assistance and training to local corporations on debt 
restructuring, problem loan workouts, and debtor/creditor agreements in 
targeted sectors;
    Train Small-Medium Enterprise (SME) executives to analyze and 
improve profitability;
    Provide technical assistance and training to improve bank and 
corporate accounting and to encourage the adoption of internationally 
accepted accounting standards;
    Support reform and implementation of key commercial laws that 
govern bankruptcy and foreclosure;
    Work with stock markets to improve the enforcement of disclosure 
requirements for publicly listed companies;
    Improve the analyses and coordination of anti-corruption efforts by 
accountability organizations;
    Expose key government agencies to best practices in public sector 
governance from other countries through training, seminars, and 
technical assistance programs;
    Strengthen epidemic and nutritional, surveillance systems through 
technical assistance;
    Improve targeting of social safety net programs, such as 
unemployment insurance, pension programs, and targeted health and 
education subsidies.
    The United States Agency for International Development will 
administer this program.
           russian arms transfers to iran and the middle east
    Question. Recent press reports indicate Russia is continuing to 
supply technical assistance to Iran to develop long-range missiles, and 
to develop its nuclear capability. According to recent public testimony 
by CIA Director George Tenet, ``expertise and material from Russia has 
continued to assist the Iranian missile effort in areas ranging from 
training and testing to components.''
    The Administration is requesting that funding for Russia increase 
from $172 million in 1999 to $295 million in 2000. Much of this funding 
is for the new Expanded Threat Reduction Assistance Initiative.
    What are the details of the threat reduction initiative?
    Answer. The Expanded Threat Reduction Initiative seeks to intensify 
the partnership among Russia, the NIS, G-8 and others to address the 
security implications of the economic crisis that affected Russia and 
the other New Independent States over the past year, including 
increased risks of weapons of mass destruction proliferation. Over the 
next five years, we will seek $4.5 billion in funding from Congress to 
expand, increase and accelerate U.S. programs for Russia and the other 
NIS to help address high priority security, arms control and 
nonproliferation requirements. This reflects an increase in FY2000-2004 
of $1.7 billion to an estimated $2.8 billion in previously planned 
programs. Additionally, the U.S. will strongly encourage the G-8, other 
nations and international financing institutions, to join in this 
effort.
    The primary objective of this Initiative is to further reduce 
international security threats by expanding, increasing and 
accelerating U.S. and international assistance activities in Russia and 
the other NIS to address high priority security and proliferation 
areas. The Initiative seeks to build on the security cooperation and 
partnerships established over the past seven years and engage for the 
long-term with Russian scientists and WMD technical experts, scientific 
institutions, universities, WMD-related industries and ministries. 
Existing programs, such as the successful Cooperative Threat Reduction 
and other security programs sponsored by the Departments of Defense, 
Energy, State and other U.S. agencies will continue. This initiative 
would expand and accelerate these existing programs, create new 
programs where they are needed, and promote complementary assistance 
efforts by other nations.
    We envision increased cooperation under the intensified partnership 
would fall in the following four priority areas:
    1. Nuclear Security Programs: increased assistance for strategic 
nuclear delivery vehicle dismantlement, warhead dismantlement, 
transport and storage security; fissile material and spent fuel 
storage; material protection, control and accounting; securing highly 
enriched uranium (HEU) and cooperation in plutonium disposition; 
reactor core conversion; and transformation of the nuclear cities;
    2. Non-nuclear Weapons of Mass Destruction Programs: increased 
assistance for Chemical Weapons Convention (CWC) implementation; 
physical security enhancements and related biological weapons (BW) 
infrastructure elimination; and export control system enhancements;
    3. Science and Technology Nonproliferation Programs: increased 
assistance to engage weapons scientists and institutes and redirect WMD 
expertise to civilian research and commercial joint ventures under the 
multilateral International Science and Technology Center (ISTC); the 
Initiatives for Proliferation Prevention (IPP) program; the Civilian 
Research and Development Foundation (CRDF) and other science and 
technology programs; and
    4. Military Relocation, Stabilization and Other Security 
Cooperation: ammunition disposal and force relocation assistance to 
help deal with the cost of military realignment outside of Russia and 
assistance to facilitate military downsizing and reforms to address 
destabilizing conditions resulting from severe economic crisis. Such 
assistance, for example, could contribute to the disposition of 
munitions in Transniestria and facilitate the withdrawal of Russian 
troops; funding from international sources could contribute to severe 
housing shortages that constrain troop downsizing and military reform.
    Question. Why would we provide money to Russia that is designed to 
reduce their military threat, while on the other hand Russia is 
assisting Iran to develop weapons of mass destruction?
    Answer. We are increasing our assistance to Russia because it 
serves U.S. national interests. Our assistance to Russia reduces and 
prevents the threat of weapons of mass destruction proliferation and 
helps ensure a democratic and market transition in Russia and the other 
NIS. The Administration's proposed Expanded Threat Reduction Initiative 
will substantially increase U.S. national security by reducing the 
threat posed by residual Soviet weapons of mass destruction (WMD) in 
Russia and the proliferation of WMD materials, technology and expertise 
to Iran and other rogue states.
    Russian weapons of mass destruction pose both a direct and profound 
nonproliferation threat as well as a latent military threat. The 
economic crisis that affected Russia and the other NIS over the past 
year has greatly increased the threat of proliferation. The 
Administration has taken a leadership role in launching an 
international effort to head off the increased danger of proliferation. 
The specific programs included in this effort will, for example, make 
clear and direct contribution to U.S. national security by safely 
eliminating and securely storing thousands of Russian nuclear warheads 
and the fissile material derived from dismantled warheads, eliminating 
stores of dangerous chemical weapons, redirecting WMD expertise to 
civilian research and commercial joint ventures, and facilitating 
Russian military downsizing and reform by helping relocate forces and 
equipment from Moldova and Georgia to Russia.
    Question. What steps has the Administration taken, and what steps 
will it take in the future, to persuade Russia to halt its arms 
transfers to Iran and other nations of the Middle East?
    Answer. We are concerned about the possibility of sales to 
countries of concern (Iran, Iraq, North Korea, Syria and Libya) and 
have expressed these concerns to Russia on numerous occasions.
    Russia appears to be abiding by the UN Sanctions on sales to Iraq. 
Under an agreement reached in 1995, Russia committed not to undertake 
any new arms contracts with Iran, but would service existing contracts. 
We believe Moscow is living up to that commitment.
    Russian entities have recently sold anti-tank guided missiles to 
Syria. We have imposed sanctions against those entities and have warned 
Russia that any future sales could result in sanctions against the 
government.
    Question. The 1999 appropriations act contains a provision that 
reduces our aid to the Government of Russia by 50% if the President 
determines that Russia is supply assistance to Iran's nuclear program. 
What is the status of this determination at the present time?
    Answer. The relevant section of the Foreign Operations 
Appropriations Acts for the Fiscal Year 1999 provides that, of the 
funds appropriated under the heading ``Assistance for the New 
Independent States of the Former Soviet Union'', 50% of the amount 
allocated for assistance for the Government of Russia shall be withheld 
from obligation until the President determines and certifies in writing 
that the Government of Russia has terminated cooperation relating to 
the implementation of arrangements to provide Iran with expertise, 
technology or equipment necessary to develop a nuclear reactor, related 
nuclear research facilities or programs, or ballistic missile 
capability. The President may waive the restrictions if he determines 
that the assistance is vital to the national security interest of the 
United States and that Russia is taking meaningful steps to limit major 
supply contracts and to curtail the transfer of technology and 
technological expertise related to developing a nuclear reactor, 
related nuclear research facilities or programs, or ballistic missile 
capability.
    Accordingly, as soon as appropriated funds were available for 
expenditure for this fiscal year, the Coordinator of U.S. Assistance to 
the New Independent States directed all agencies implementing 
assistance programs in Russia to withhold 50% of the relevant FY99 
funds allocated for assistance to the Government of Russia until 
further notice.
    Based on our current evaluation of Russian cooperation with Iran, 
particularly with regard to development of a nuclear reactor, we do not 
anticipate that it will be possible for the President to make the 
necessary certification or waiver under the FY99 provision. We are 
therefore consulting with the relevant agencies and with congressional 
staff regarding the 50% reduction in assistance to the Government of 
Russia. We are examining possible reprogramming of FY99 funds for 
assistance to non-governmental entities or for other countries in the 
NIS. Some portions of these funds are also being reprogrammed for 
assistance to front-line states affected by the Kosovo conflict. We 
will keep you and your staff informed as we give further consideration 
to these important non-proliferation and assistance issues.
                 assistance for the west bank and gaza
    Question. At the time of the Oslo Agreement, the President made a 
commitment to provide a total of $500 million in assistance for the 
West Bank and Gaza over a five-year period, including $75 million 
annually through the Economic Support Fund and $25 million in OPIC 
funding. The OPIC activities never materialized, primarily due to the 
fact it is very difficult for private companies to operate under the 
auspices of the Palestinian Authority.
    We have met our five-year commitment through the Economic Support 
Fund by the appropriation of $75 million for fiscal year 1999. Now the 
President has requested an additional $400 million over three years for 
the West Bank and Gaza as part of the Wye River supplemental.
    However, you are also requesting $100 million as part of the 
regular fiscal year 2000 budget for the West Bank and Gaza. Why do we 
have to fulfill a commitment that was never made? Can't we save that 
money, or do these five-year commitments continue indefinitely?
    Answer. The Administration's budget proposal for FY 2000 includes 
an additional $25 million in economic support funds (ESF) for the West 
Bank and Gaza--bringing the total request to $100 million.
    None of these funds will go to the PLO, nor will we provide any 
financial assistance directly to the Palestinian Authority.
    We intend to use these funds to expand our assistance to the 
private sector, specifically to broaden our support for private trade 
organizations and help Palestinian enterprises meet international 
product standards.
    We will also use the funds to expand our assistance in the water 
sector, which includes water management activities, water usage, 
wastewater treatment, and the reuse of water for agricultural purposes.
    The additional assistance will be particularly welcome given the 
significant declines in the Palestinian economy since the signing of 
the Declaration of Principles with Israel in 1993--per capita income 
for Palestinians in the West Bank and Gaza has fallen by one-third 
since that time. The ESF increase will contribute to reversing this 
economic decline while building a constituency for peace.
    The additional funding requested for the Palestinians as part of 
the Wye Supplemental covers other critical needs.
    U.S. leadership is essential to mobilizing broader support for the 
Palestinians from the international community. Our pledge to work with 
Congress to secure $400 million in supplemental assistance helped 
mobilize substantial commitments from the Europeans ($480 million), 
Japan ($200 million) and Norway ($180 million) and others.
    Some of the Wye supplemental funding would be used for projects 
directly related to Wye implementation; other activities would include 
community development, rule-of-law, preparation of Bethlehem for its 
celebrations in the year 2000, maternal-child health care, and a 
scholarship fund for graduate level education.
                   voluntary peacekeeping operations
    Question. The President's request for voluntary peacekeeping 
activities totals $130 million, a 70% increase over the fiscal year 
1999 level of $76.5 million.
    The two biggest components of the increase are:
    1. A $33 million increase for the Organization for Security and 
Cooperation in Europe to monitor a cease fire in Kosovo that doesn't 
exist; and
    2. An $11 million increase for activities in Bosnia.
    What are the reasons for the size of these increases? Why are we 
spending more money in Bosnia for these activities, when our bilateral 
program is being reduced.
    Answer:
Funding for Kosovo
    We have requested an increase of $33 million (a total of $43 
million in FY00) to pay for the U.S. contributions to the OSCE Kosovo 
Mission, the largest field mission undertaken by the OSCE to date. 
Prior to commencement of NATO operations, the OSCE Kosovo Mission's 
1380 international staff were evacuated to FYR Macedonia, and then 
drawn down to core staffing levels.
    The majority of the approximately 300 remaining core staff have 
been redeployed to assist UNHCR in addressing the humanitarian crisis 
on the ground in FYR Macedonia and in Albania. The balance are 
preparing for a rapid reintroduction of the OSCE Mission into Kosovo--
once conditions allow--to undertake civilian implementation tasks.
    We have requested $43 million in FY00 PKO funds to pay for our 
share of the costs of the on-going OSCE Kosovo Mission's activities, 
and for present estimates of an eventual OSCE-led civilian 
implementation effort in Kosovo.
Funding for Bosnia and Other OSCE Missions and Activities
    Our OSCE-related costs in Bosnia are, in fact, expected to decline 
next year. We have requested this increase to pay for increased 
expenses in Croatia, Albania, FYR Macedonia and other OSCE missions.
Croatia
    The OSCE assumption of UNTAES policing responsibilities in Croatia, 
and expected Presidential elections in 2000, will require additional 
OSCE resources.
    The presence of OSCE police monitors in eastern Slavonia is 
integral to maintaining the peace and creating an environment fostering 
refugee return.
    OSCE is expect to play a critical role in assuring that acceptable 
election standards are observed--a key to firmly establishing a stable, 
enduring peace in Croatia.
Albania and FYR Macedonia
    Spillover effects from the crisis in Kosovo have had a significant 
impact in the region and on the OSCE's responsibilities in these 
countries.
    In the past year, the OSCE has moved proactively to address this 
situation. In order to monitor the situation on the border with Kosovo, 
the OSCE increased the mandated international staff of the Albania 
Presence twice in the past year, and opened five branch offices in 
Northern Albania.
Other OSCE Missions
    The OSCE presently has 18 field missions operating throughout 
Eurasia, including three new OSCE field offices in Central Asia. Based 
on the President's Berlin initiative, we have actively encouraged the 
OSCE to enhance its outreach to Central Asia and the Caucasus--areas 
where democratization and respect for human rights are weakly rooted.
    We strongly support OSCE's work to foster enhanced compliance with 
democratic standards and human rights through the establishment of in-
country field missions and the efforts of the OSCE's Office of 
Democratic Institutions and Human Rights (ODIHR).
    ODIHR's programs focus on improving compliance with key OSCE 
commitments--including respect for fundamental human rights, 
democratization, and establishment of transparent free-market 
economies.
    Question. If a peace agreement is signed for Kosovo, will the 
Administration be requesting additional funds for implementation of the 
agreement? If so, how much will be requested, and what would the funds 
be used for?
    Answer. Ongoing NATO operations in Kosovo and Serbia have changed 
our estimate of what will be needed to address humanitarian needs, 
implement a peace agreement, contribute to reconstruction, and pursue a 
program of economic and democratic development. We will probably need 
to request supplemental appropriations to meet these objectives. We are 
currently working with DOD and OMB to determine how much is needed and 
expect to present our request to you shortly.
                              north korea
    Question. The United States continues to claim that the 1994 Agreed 
Framework between the United States and North Korea is the basis for 
our policy with that country. The Agreed Framework was designed to deal 
with one nuclear reactor in that country. However, it does not directly 
deal with the development by North Korea of intercontinental ballistic 
missiles that may have nuclear warheads.
    It appears the primary goal of the North Koreans is the development 
of an ICBM that can threaten the mainland of the United States. 
According to recent public testimony by CIA Director George Tenet, they 
will soon ``be able to deliver large payloads'' to the continental 
United States.
    This is not just a case of nuclear threats to our allies in Asia; 
North Korean nuclear and missile development activities are a direct 
threat to the national security of the United States and its citizens.
    In light of that reality, why do we continue to act as if the 
implementation of the Agreed Framework is the only game in town with 
the North Koreans? Does it make sense to continue to provide foreign 
assistance to a country that is working to develop missiles that can 
strike the West Coast of the United States?
    Answer. The Agreed Framework was concluded in the context of a 
nuclear nonproliferation crisis in 1994, and was designed to deal with 
the nuclear reactors and related facilities which the North was then 
building or operating at Yongbyon and nearby Taechon, which had the 
potential to produce significant amounts of nuclear weapons-usable 
material.
    The Agreed Framework requires the DPRK to freeze and eventually 
dismantle these facilities. The International Atomic Energy Agency 
(IAEA) monitors the freeze full-time and reports that it remains in 
place.
    The IAEA has also placed virtually all of the approximately 8000 
spent fuel rods, or over 98 percent of the DPRK's estimated total, 
under seal. These rods, canned by a U.S. team in cooperation with the 
DPRK, are to be removed upon completion of the first of two 
proliferation-resistant, light-water reactors to be supplied by the 
North Korean Peninsula Energy Development Organization (KEDO).
    In effect, the nuclear freeze on the facilities at Yongbyon and 
Taechon prevents the DPRK from using these facilities to produce 
plutonium for nuclear weapons. This is very much in the U.S. security 
interest.
    The Framework has also served as a basis for our broader 
relationship with North Korea. That relationship links U.S. movement 
toward political and economic normalization to parallel DPRK steps on 
issues of great concern to the U.S., with ballistic missile development 
among the most prominent.
    We have told Pyongyang that any further long-range missile tests 
would have very serious consequences for our relations with North 
Korea. Failure to make significant progress on missile issues will 
prevent us from moving forward with our relations with the DPRK. This 
point has been made clear to Pyongyang repeatedly, including during the 
just-completed Fourth Round of Missile Talks held in Pyongyang March 
29-30.
    The prospect of improved relations provides an incentive for the 
DPRK to moderate its missile activities over time. Meanwhile, we 
continue, along with our ROK and Japanese allies, to press the DPRK to 
cease all development, testing, deployment and export of long-range 
missiles and related missile technology.
    The purpose of the Agreed Framework is not to provide foreign 
assistance to North Korea. The heavy fuel oil (HFO) which KEDO 
provides, pending the completion of the first light-water reactor, is 
an interim replacement for the energy that North Korea agreed to forego 
by freezing its nuclear reactor facilities at Yongbyon and Taechon.
    While the U.S. has taken a leading role in funding KEDO's HFO 
program, other countries have also contributed amounts which, taken 
together, approach the magnitude of the U.S. contribution. The ROK and 
Japan have agreed to provide the lion's share of funding for the LWR 
project, funding which will quickly surpass the U.S. contribution to 
KEDO.
    Meanwhile, the U.S. continues to provide humanitarian food aid to 
North Korea in response to appeals by the World Food Program and out of 
concern over the dire humanitarian situation there.
    It is the longstanding policy of the U.S. around the world to 
provide food aid strictly on a humanitarian basis. The amount of such 
food assistance is based on need, as assessed by the World Food Program 
and other international organizations, and our own information. All 
food assistance provided by the U.S. to North Korea is monitored by WFP 
and NGO monitors to ensure that it continues to reach those for whom it 
is intended.
              comprehensive nuclear test ban treaty (ctbt)
    Question. We've recently read very disturbing press reports about 
spying by China at U.S. nuclear laboratories in New Mexico. These 
reports also state China may have used this information to develop 
small nuclear warheads, very similar to those used by our submarine 
missiles.
    At the same time, we are being asked to appropriate an additional 
$20 million to prepare for implementation of the Comprehensive Test Ban 
Treaty, or CTBT. The treaty has not been ratified by the Senate.
    In order for the treaty to come into force, 44 countries must 
ratify it. China and North Korea are two of those countries.
    Do we have an indication from China and North Korea when, or if, 
they will ratify the Comprehensive Test Ban Treaty?
    Answer. We have encourage all states, including China and North 
Korea, to ratify the CTBT promptly. China signed the treaty on the same 
day that the U.S. did. It is participating actively in the work of the 
CTBT's Preparatory Commission in building the international 
verification regime.
    While China has not committed to a specific date for ratification, 
Chinese officials have indicated that they believe it would be 
advantageous to ratify by September. This is the earliest date at which 
a conference of ratifying states can be convened to consider ways to 
expedite entry onto force. President Jiang Zemin, in a March 26 speech 
to the Geneva Conference on Disarmament, noted that early entry into 
force of the CTBT had become a more pressing task, and said the Chinese 
government would soon officially submit the treaty to the National 
People's Congress for ratification. At the same time, it is clear that 
China is closely watching both the U.S. ratification process and India 
for signs that it will adhere to CTBT as it has indicated it would.
    North Korea is a member of the Conference on Disarmament (CD), 
which negotiated the CTBT. While the DPRK neither sought to block 
consensus on the text in the CD nor voted against the UN General 
Assembly resolution adopting the Treaty, it has not yet signed. The 
issued has been raised with North Korea on a number of occasions to 
stress to the DPRK the importance of CTBT signature and ratification.
    Question. If they do ratify the treaty, how can we ensure that they 
will abide by its terms? Based on press reports it appears North Korea 
has not complied with the Agreed Framework. They are refusing us access 
to a site that may have been used to develop nuclear material; the CTBT 
calls for inspections when a violation may have occurred as well. What 
will happen under that treaty if the North Koreans refuse to grant 
inspection access to their nuclear sites?
    Answer. Regarding compliance with Agreed Framework, the IAEA 
conducts continuous, full-time inspections of the Yongbyon and Teachon 
nuclear facilities and has determined that the DPRK is complying with 
the nuclear freeze provisions of the Agreed Framework.
    When the U.S. developed suspicions about certain underground 
construction at Kumchang-ni, although we had no basis to conclude that 
the DPRK was in violation of the Agreed Framework, we followed up 
aggressively to demand that Pyongyang take steps to remove our 
concerns. After several months of intense negotiations, our negotiating 
team concluded with the DPRK on March 16 an agreement for U.S. access 
to the Kumchang-ni site. We are confident that this agreement, if fully 
implemented, will provide a basis to remove completely our concerns 
about the site. The initial site visit will occur in mid-May, with a 
second visit in May 2000 and subsequent visits upon U.S. request, as 
long as our concerns about the site remain.
    North Korea has not signed the CTBT, but the following provisions 
regarding on-site inspections (OSIs) would apply to any state party:
    Under the Treaty, an OSI can be requested to clarify whether a 
nuclear explosive has been carried out in violation of the Treaty, and 
to gather facts that might assist in identifying a possible violator. 
The request will cover a defined geographic area, and under the Treaty 
each state party commits itself to permit the CTBT Organization to 
conduct on-site inspections on its territory or at places under its 
jurisdiction or control.
    An inspected state party is also obliged, among other things, to 
provide access within the inspection area, refrain from impeding the 
inspection team's ability to more within the inspection area, and make 
every reasonable effort to demonstrate its compliance with the Treaty. 
At the same time, it has the right to take measures to protect national 
security interests and prevent disclosure of confidential information 
not related to the purpose of the inspection.
    If a state party fails to comply with its OSI obligations, the 
Treaty provides for various measures to ensure compliance, including 
recommending sanctions and bringing the matter to the attention of the 
United Nations. unanimous consent
                              agriculture
    Question. This Subcommittee has emphasized the importance of 
international agriculture assistance in overall development strategy. 
The Economic Support Fund has played a role, especially in Egypt, in 
funding this important aspect of our assistance program. How much of 
your FY 2000 program will be for agriculture and how does that number 
compare with FY 1999?
    Answer. The Administration's request for Economic Support Funds 
(ESF) is $2.389 billion, $44 million less than the FY 1999 level. Of 
this amount, $83.2 million is for agricultural programs, a drop of 
$62.3 million from the current FY 1999 estimate of $145.5 million. The 
FY 2000 ESF planning level for agricultural programs in Egypt is just 
over $43 million. This compares to Egypt's FY 1999 agricultural level 
of $106 million. This significant drop is due partly to the decreasing 
ESF being provided to Egypt. The FY 2000 request of $715 million in ESF 
for Egypt is $60 million less than the FY 1999 level of $775 million 
and $100 million less than Egypt's FY 1998 level of $815 million. The 
drop is also due in part to a decision to shift the program focus in 
Egypt to broader economic reform issues outside the realm of 
agriculture. Other agricultural ESF programs in Jordan, Lebanon, Haiti, 
and Guatemala remain constant for FY 1999 and FY 2000.
         Questions for the Record Submitted by Mr. Knollenberg
                               azerbaijan
    Question. On Monday, March 1, the government in Azerbaijan 
announced that a Russian warplane had violated its airspace for two 
minutes. The government considered the event to be an act of 
aggression. As such, Azerbaijan announced that it would welcome NATO 
bases and troops to guard against what it considers to be a ``Russian 
threat.'' How does the U.S. government respond to Azerbaijan's request 
for NATO bases and/or troops to enhance Azeri security? Do you think 
that would be a viable option for the western alliance? How would it 
affect U.S. relations with Russia, Armenia and Iran?
    Answer. We are aware of various statements made by Azerbaijani 
officials on this subject. However, the United States has received no 
formal request from the Government of Azerbaijan to establish a 
military base there. The USG has no plans to open military bases in 
Azerbaijan. Our policy has been to discourage the introduction of new 
foreign military forces and equipment into the region because these 
could be viewed as destabilizing and threatening and could complicate 
the peaceful resolution of such disputes as the conflict over Nagorno-
Karabakh.
    We do, however, maintain a security dialogue with Azerbaijan, as 
well as with the other Caucasus states, Armenia and Georgia. We are 
also continuing to develop military cooperation with Azerbaijan within 
the limitations set out in Section 907 of the Freedom Support Act, 
which restricts direct assistance to the Government of Azerbaijan, and 
related legislation.
            Questions for the Record Submitted by Mr. Forbes
    Question. For several years now, the Administration has made it a 
policy to forgo nuclear weapons testing and procurement and to sharply 
cut the budget for procurement of conventional weapon systems. In light 
of the recent discovery of a Chinese spy at a major nuclear weapons 
laboratory and bellicose statements from Beijing threatening Taiwan and 
the U.S., what actions have you taken to curtail security assistance or 
defense sales to China? What actions might you suggest that we take to 
aid Taiwan? How does the recent espionage case affect the way that you 
approach arms control issues? Might the Administration make it a policy 
to sharply increase defense sales in the Pacific region to offset 
China? Are the Administration's arms control and security assistance 
goals compatible?
    Answer. There has been no change in the Administration's policy 
regarding the export of defense articles and services to China. We do 
not provide security assistance to China. After the Tiananmen Square 
incident, the Department prohibited the export of defense articles and 
services to the PRC. The prohibition on the export of defense articles 
was later legislated in the Tiananmen Sanctions Act of 1990.
    Regarding aid to Taiwan, the Administration has a strong interest 
in maintaining peace and stability in the Taiwan Strait. For this 
reason, we have approved defensive arms sales to Taiwan consistent with 
the Taiwan Relations Act. We will continue to monitor the military 
balance in the Taiwan Strait closely and meet our obligation to provide 
Taiwan the arms it needs for an adequate defense.
    The Administration takes seriously the questions regarding Chinese 
espionage raised by the recent case. However, I am not in a position to 
comment further on this specific case due to the on-going 
investigation. We have no illusions about China. At the same time, 
gaining China's cooperation on our security agenda is critical to 
enhancing security in the region as well as promoting and effectively 
implementing global arms control regimes. Over the last few years I 
have established a regular dialogue with my Chinese counterparts on 
nonproliferation, arms control and international security issues, which 
is an important means of pressing China to adhere to international 
nonproliferation standards.
    Countries' interest in advanced defense systems obviously is 
influenced by China's own behavior as well as that of the DPRK, which 
China has some ability to influence.
    The Administration will not respond by increasing arms sales to the 
Asia-Pacific region. The basis of our defense cooperation with nations 
in the Asia-Pacific region is not linked to the health of U.S.-China 
relations. Rather, our defense sales and other security assistance in 
the region is governed by our overwhelming desire to maintain peace and 
stability, creating a suitable environment for economic recovery. Given 
the fact that the United States has five treaty allies in the Asia 
Pacific region, we naturally maintain close military ties throughout 
the region.
    Our arms control and security assistance goals are not 
incompatible. Whenever we consider the potential transfer of a major 
defense article into this region--or any other region--we seek to 
ensure that the potential transfer will not lead to an arms race or 
violate any arms control regimes. We analyze all potential transfers on 
a case-by-case basis following the guidelines and criteria laid out in 
PDD-34, the Conventional Arms Transfer Policy.
            Questions for the Record Submitted by Ms. Pelosi
                              russia/iran
    Question. Fifty percent of the funds provided for assistance 
through the Russian Government has been withheld pending an assessment 
of Russian cooperation with Iran. Progress has been slow so far. What 
can we expect from the upcoming meetings with Vice-President Gore and 
high level Russians later this month?
    Answer. Over the past several weeks, U.S. and Russian experts have 
developed action plans aimed at curtailing cooperation by Russian 
entities with Iran's missile and nuclear programs.
    U.S. Special Ambassador Gallucci and Russian Space Agency head 
Koptev agreed to a work plan that addresses some of our most pressing 
concerns about missile proliferation, including development on a 
priority basis of internal compliance offices at several entities of 
concern.
    We have offered technical assistance to help these entities set up 
necessary export control regimes. The Russian government has made a 
commitment to take effective measures to prohibit Iranian missile 
specialists from operating in Russia and to facilitate the early 
adoption of the Russian export control law.
    This work plan could represent a path forward if the Russian 
government acts effectively and quickly. We will continue to raise 
missile and nuclear cooperation in our discussions with the Russian 
side until all of our concerns are resolved.
    Question. The Administration has stated clearly that they intend to 
limit the Russians' ability to launch commercial satellites this year 
if cooperation with Iran continues. How would you assess the 
effectiveness of this tool for leverage versus the tool of 50% cut off 
of U.S. assistance through the government?
    Answer. There is no evidence that broad, general restrictions on 
U.S. assistance to the Government of Russia have created effective 
leverage on Russian policies. Rather, such restrictions cut off 
assistance that is in U.S. national security interests.
    The Administration supports creating incentives for Russian 
entities to meet international nonproliferation standards and 
imposition of specific, targeted and limited sanctions against those 
entities for violating such standards. The Administration has informed 
the Russian Government since January 1997 that we will be unable to 
raise the current quota for launches of satellites to high earth orbit 
until Russia halts cooperation with Iran's ballistic missile program.
    The launch quota limitation would deprive the Russian space 
industry of a sustainable stream of revenue, presently worth $70 
million per launch. We believe the launch quota limitation gives 
individuals and entities in the Russian aerospace sector a strong 
incentive to halt these technology transfers.
    Question. Large increases have been sought in the FY 2000 budget 
for the Expanded Cooperative Threat Reduction Program. Much of the 
additional $242 requested is for Russia. Explain how these expanded 
programs benefit U.S. security, and will this expansion help lessen 
Russian Cooperation with Iran.
    Answer. The Administration's proposed Expanded Threat Reduction 
Initiative (ETRI) focuses on increasing U.S. national security, not 
providing assistance to Russia. Current economic crisis in Russia and 
other NIS prompted the development of ETRI as the best mechanism to 
reduce the threat posed by residual Soviet weapons of mass destruction 
(WMD) in Russia and the proliferation of WMD materials, technology and 
expertise.
    The FY00 request for the Expanded Threat Reduction Initiative 
(ETRI) overall in the NIS account is $241 million. Of this, $122 
million is for ETRI activities in Russia, an increase of $97 million 
over FY99 funding for these programs ($25 million). The increased 
funding will allow us to maintain the substantial progress we have made 
of the past seven years and to expand into some new areas where we have 
assessed proliferation threats, such as security of biological 
facilities and materials. Priority nonproliferation programs will 
promote economic transition and infrastructure reforms while reducing 
the risks of proliferation of weapons of mass destruction, weapons 
delivery systems, materials, technology and scientific and technical 
expertise. They include:
    International Science and Technology Center (ISTC) in Moscow and 
U.S. Civilian Research and Development Foundation (CRDF) programs to 
provide thousands of former Soviet weapons scientists with civilian 
research and development opportunities, business training and exchanges 
in the U.S.;
    U.S. Biotechnology Science Collaboration programs by the 
Departments of Agriculture (USDA) and Health and Human Services (HHS) 
to redirect former Soviet biological weapons expertise and facilities 
to civilian commercial, agricultural and public health activities;
    Equipment and training to strengthen Russian export control and 
border security capabilities to stop weapons proliferation across 
Russia's borders; and
    Initial project development for ammunition disposal and force 
relocation assistance to facilitate Russian troop withdrawal from 
Moldova and Georgia.
    Such cooperative U.S.-Russian projects provide an alternative for 
Russian enterprises to cooperation with proliferant states, such as 
Iran. Moreover, we have made it clear to Russian enterprises and 
institutes engaged in these cooperative U.S.-Russian activities that 
Russian entities that are found to be engaging in proliferation 
activities will not participate in the benefits of U.S. assistance.
    Increased investment in programs to redirect the expertise of 
former WMD scientists helps keep those individuals out of the employ of 
such states. There is no guarantee, even with expanded assistance, that 
proliferation of weapons expertise will not occur. Nor is there are 
expectation that U.S. assistance alone could support every former 
Soviet weapons scientist. However, every weapons scientist who is 
employed by such threat reduction programs is one less who may be 
tempted by rogue states such as Iran to help them develop weapons of 
mass destruction or delivery systems.
    Question. Explain your plan to fund the removal of Russian military 
bases from Moldova and Georgia with these funds. What does our money 
pay for?
    Answer. In addition to political obstacles, there are several 
logistical problems that must be addressed in order to facilitate the 
eventual removal of Russian forces from Moldova.
    There are huge quantities of ammunition that must be moved or 
destroyed. Much is old and unstable and there is a real threat of the 
remaining ammunition being diverted to areas of conflict. There is 
international interest in addressing this issue. The U.S. is prepared 
to contribute to the cost of disposing of these munitions.
    The FY2000 funding request includes $43 million for Military 
Relocation assistance proposed as $3 million for Russia, $30 million 
for Moldova and $10 million for Georgia. Funds would support project 
development costs, including initial efforts by technical experts to 
assess and identify bottlenecks to equipment removal, and the transport 
and expedited removal or elimination of such equipment. U.S. funds may 
be used to pay the costs of shipping this equipment by rail back to 
Russia, or if the parties agree, to destroying some or all of it in 
place.
    Costs for complete disposal of Russian ammunition stocks in Moldova 
and equipment removal in Georgia using U.S. environmental standards 
would exceed the funding levels requested. The proposed level of 
funding would give imeptus to international efforts aimed at 
accelerating existing disposal efforts and support investigation into 
alternative methods.
    The Russian military faces chronic housing shortages in Russia and 
bringing these forces out of Moldova will only exacerbate this problem. 
While the U.S. is constrained from constructing housing for the Russian 
military, we believe this is an area where some of our international 
partners could play a useful role.
    The Russian military will face similar problems in Georgia and we 
and the international community should be prepared to provide similar 
assistance at the appropriate time.
                      russia/iran--science centers
    Question. Explain why the Science Centers program is anticipated to 
increase from $21 million this year to $95 million in 2000.
    Answer. The proliferation risk posed by the extensive former Soviet 
weapons establishment is heightened by severe economic distress in 
Russia and elsewhere among the NIS. THe original FY 2000 budget request 
of $40 million was already a substantial increase over prior years, but 
was formulated before the August 1998 financial crisis in Russia. The 
anticipated increase in funding for the Science Centers will redress 
serious gaps in our program coverage while allowing the U.S. to take 
advantage of opportunities that have been cultivated.
    Beginning with initial funding levels of $35 million for Russia and 
Ukraine only, subsequent funding for the Science Centers program has 
declined to levels of $14-18 million in FYs 1996, 1997 and 1998. These 
budget had to cover greatly expanded program activity for Russia and 
Ukraine, as well as in Kazakhstan, Belarus, Armenia, Georgia, 
Kyrgyzstan, and Uzbekistan. In addition, Congressional limitations on 
overall funding to the Government of Russia resulted in a FY 1998 
budget for Russia of only $4.2 million. Since the program began 
operations in 1994, it has provided unprecedented access to and insight 
about the extensive former Soviet weapons complex, in the context of a 
fully cooperative and transparent effort among all participating 
countries. We now have a much better understanding of the extent of the 
overall proliferation threat, as we work with former Soviet facilities 
and technologies that were unknown to us just a few years ago. In light 
of current economic uncertainties in the NIS, it is imperative that we 
fully engage the weapon science expertise that these countries have 
inherited from the former Soviet Union.
           Questions for the Record Submitted by Mr. Kingston
                                  kedo
    Question. First of all, I have to at least comment on the $20 
million increase requested for KEDO. I'd like to associate myself 
strongly with the comments of the chairman on this issue and repeat the 
irony of North Korea's status as one of our leading foreign aid 
recipients in Asia. I would just add that, in light of this massive 
increase and our strong concerns about KEDO to begin with, I think it 
may be time for this subcommittee to receive a separate, formal 
briefing from DoD, IAEA, State, and whoever else is appropriate on 
North Korea, its compliance with the terms of the Agreed Framework and 
what exactly is going on underneath those North Korean mountains. I'll 
put that suggestion before the chair and leave it open for any reaction 
either of you may have.
    Answer. The Administration has regularly briefed the staff of this 
and other relevant Committees of the Congress. We would be happy to 
arrange for a briefing for members of North Korea and the Agreed 
Framework at a time of your convenience.
    Regarding compliance with the Agreed Framework, the IAEA conducts 
continuous, full-time inspections of the Yongbyon and Taechon nuclear 
facilities and has determined that the DPRK is complying with the 
nuclear freeze provisions of the Agreed Framework.
    When the U.S. developed suspicions about certain underground 
construction at Kumchang-ni, although we had no basis to conclude that 
the DPRK was in violation of the Agreed Framework, we followed up 
aggressively to demand that Pyongyang take steps to remove our 
concerns.
    After several months of intense negotiations, our negotiating team 
concluded with the DPRK on March 16 an agreement for U.S. access to the 
Kumchang-ni site. We are confident that this agreement, if fully 
implemented, will provide a basis to remove completely our concerns 
about the site.
    The initial site visit will occur in mid-May, with a second visit 
in May 2000 and subsequent visits upon U.S. request, as long as our 
concerns about the site remain.
    The Administration has briefed Committee staff on these 
developments and will of course be prepared to brief you, in a setting 
appropriate to the sensitivity of the information, on the outcome of 
our visits to the Kumchang-ni site.
                      peru-ecuador peace agreement
    Question. How will the requested $20 million in Economic Support 
Funds for the Peru-Ecuador peace agreement be spent? Is that defined 
yet? Is is simply intended as a trophy for resolving their border 
dispute?
    Answer. In October 1998, Ecuador and Peru signed a comprehensive 
peace agreement that put an end to an often bloody, century-and-a-half 
old conflict over demarcation of their border. The United States, as 
one of the Guarantors of the 1942 Rio Protocol, which established the 
framework for delimiting the border, invested considerable time, 
effort, and resources in helping the parties to achieve this peace. To 
make it acceptable to both sides, regardless of the final demarcation 
of the border, the peace settlement was built on a series of 
agreements, including a treaty of commerce and navigation and a 
binational peace fund for border integration, designed to compensate 
difficult political concessions with investments to stimulate growth 
and improve living conditions in an area impoverished by years of 
conflict.
    The United States plans to provide $10 million each to Peru and 
Ecuador in FY 2000 to help launch, under the border integration 
agreement, a ten-year program Peru and Ecuador developed to strengthen 
and integrate communities on either side of the border through improved 
telephone service, oil pipelines, road construction, energy projects, 
and other efforts to improve the lives of their citizens.
    The Economic Support Funds (ESF) will aid successful implementation 
of the peace settlement by helping to fund the border integration 
program by, among other things, supporting micro-entrepreneurs, 
strengthening local governments, improving health care, and helping to 
create permanently demilitarized ``peace parks'' along the border to 
enhance natural resource management. Specific projects for which U.S. 
funding is proposed will be reviewed and approved by USAID and the 
State Department. Other governments and international organizations, 
including the Inter-American Development Bank, the Andean Development 
Bank, and the World Bank, are also supporting this border integration 
program with donations of their own.
                        environmental diplomacy
    Question. I don't yet see exactly why you are requesting a new $15 
million Environmental Diplomacy account. Is this a new account or is it 
an earmark under ESF?
    Answer. We are not requesting a new account. Rather, we are 
proposing to use $15 million in ESF funds to carry out targeted 
activities in response to three critical policy needs.
    To encourage acceptance of the U.S. position in international 
environmental negotiations, outside the normal negotiating venues such 
as New York and Geneva, we will engage in activities that improve 
international understanding of our positions and develop capacity 
through regional workshops and training efforts. For example, program 
funds will be used for workshops and related programs designed to 
illustrate effective control strategies with regard to DDT and other 
persistent organic pollutant chemicals in use in developing countries, 
and to promote compliance, especially by developing countries, with 
international environmental agreements.
    To deal with transboundary environmental challenges that cannot be 
addressed through either global or national efforts, we will promote 
regional cooperation. For example, program funds will be used to assist 
Russia in reducing air and water pollution in the Arctic. Environmental 
diplomacy funds will also be used to sponsor regional conferences and 
workshops with Southeast Asian governments (such as the Philippines, 
Indonesia, Fiji) on the sustainable management and conservation of 
coral reefs, including destructive fishing practices.
    To address emerging environmental priorities we will use program 
funds to determine the scope of the problem and to foster political 
commitment and to develop international partnerships with the goal of 
identifying courses of action.
    Question. I understand your stated goal to encourage more 
meaningful/substantive commitments from developing nations (such 
commitments are missing in the Kyoto agreement) regarding reducing 
various forms of pollution, but why do you propose pursuing this 
outside of the regular State Department diplomatic process and budget 
in CJS? Why are you requesting a new, separate account for diplomatic 
purposes?
    Answer. We are not requesting a new separate account in foreign 
assistance for diplomatic purposes. We are proposing to use a small 
portion of ESF ($15 million) to advance the broad range of 
environmental challenges we face. Our proposal complements the ongoing 
long-term developmental assistance agenda carried out by other U.S. 
government agencies and institutions.
    The Department would not normally request funds for this program 
through the C-J-S appropriation, which typically funds Departmental 
operating expenses such as USG salaries and expenses, official travel, 
other support costs (e.g., computers and furniture), as well as 
assessed contributions to international organizations.
    Since environmental diplomacy resources will be used for programs, 
projects, and activities in support of USG international environmental 
objectives, it is more appropriate to request these funds from within 
the foreign operations appropriation.
    With regard to your reference on the Kyoto Protocol, we intend to 
use a portion of these funds to advance existing commitments under the 
UN Framework Convention on Climate Change ratified by the United States 
in 1992, such as reporting by developed and developing countries on 
actions taken to reduce greenhouse gas emissions.
                        no sweat shop initiative
    Question. Along the same lines, why are you creating a new program 
to provide grants to labor unions and business groups, for example, a 
private sector labeling campaign? Human Rights observance in the 
workplace and elsewhere is a fundamental diplomatic pursuit of State. 
We should be pushing for these goals diplomatically, but why would we 
create a new $5 million program to essentially contract responsibility 
out to labor unions and other groups? It seems more appropriate to 
support Kathy Lee Gifford's private sector labeling campaign 
diplomatically than with a new multi-million dollar account.
    Answer. The SUG has supported the Apparel Industry Partnership's 
(AIP) private sector ``No Sweat'' initiative to eliminate unsafe, 
unhealthy, or abusive labor conditions, particularly in foreign 
factories that produce apparel goods for the American market. The AIP 
approach is only the first step. We believe the new ``No Sweat'' 
initiative will enhance the work being done by the AP, and will 
encourage more responsible corporate citizenship by U.S. companies 
abroad. For this reason, the administration is proposing a broader-
based program that will go beyond what the AIP has been able to 
accomplish.
    Thus, the Administration's proposed $5 million ``No Sweat'' 
initiative is aimed at fostering the burgeoning effort to develop codes 
of responsible conduct for all industries that produce for the U.S. 
market. The proposed initiative would provide grants to labor unions, 
business groups, and other NGO's that support and encourage monitoring/
labeling, ``Model Business Principles'' type programs in various 
industries, both domestically and internationally, and worker's rights.
    The ``No Sweat'' moniker is taken from the AIP's new Fair Labor 
Association (FLA) program, which will award ``No Sweat'' labels to 
companies in compliance with the AIP code of conduct. The FLA and other 
similar groups will be candidates for support from this initiative.
    The ``No Sweat'' initiative is one of the key components of the 
Administration's international labor diplomacy agenda. It is very 
important for the USG to be seen as taking the lead internationally in 
promoting good working conditions, worker rights and core labor 
standards worldwide. The ``No Sweat'' initiative allows the USG to 
promote these core labor and human rights values by encouraging labor 
unions, corporations and NGO's to form partnerships to achieve these 
shared goals.
                 nonproliferation and disarmament fund
    Question. What is the distinction between the goals/purpose of the 
Nonproliferation and Disarmament Fund versus the Cooperative Threat 
Reduction (Nunn-Lugar) program? Are there efforts closely coordinated 
or simultaneously administered despite their separate funding streams? 
Have or should our departments give thought to consolidating the NDF 
and the CTR administratively if they aren't already? It could save some 
administration duplication and cut some cost.
    Answer. The Nonproliferation and Disarmament Fund (NDF) is a small, 
but highly flexible, program that supports primarily specific USG 
diplomatic initiatives to prevent countries of concern from acquiring 
weapons of mass destruction by permitting a rapid response to 
unanticipated or unusually difficult, high-priority requirements or 
opportunities worldwide. Its projects are often executed directly by 
the Department of State or an American Embassy--thereby keeping policy 
direction and execution closely linked.
    The NDF currently has projects underway that affect over 70 
countries. Both the Under Secretary of State for Arms Control and 
International Security Affairs and the Assistant Secretary for 
Nonproliferation are personally involved in the approval of every NDF 
project.
    The Cooperative Threat Reduction (CTR) program is, by contrast, a 
large DOD program that primarily assists the countries of the FSU in 
the dismantlement of the extensive nuclear, chemical, and biological 
arsenal left behind by the former Communist regime.
    In those few cases where NDF and CTR have worked together, 
cooperation has been close. For example, when the USG had an 
opportunity to acquire and remove HEU from Georgia, State led the 
negotiations and used the NDF to procure the sensitive materials, DOE 
packaged the materials, and DOD/CTR provided security and transport.
    NDF and CTR are sharply focused tools that permit the Departments 
of State and Defense respectively to meet their national security 
obligations. There is little overlap between the two programs and the 
operating environments are very different. We believe consolidation of 
these diverse functions would decrease the effectiveness, and 
complicate administration, of both programs.
                 Submitted to the Department of Defense
        Questions for the Record Submitted by Chairman Callahan
                       foreign military training
    Question. Do you have an estimate of the funding that is provided 
through the foreign operations subcommittee for these activities, 
through the IMET program and others?
    Answer. Of the roughly $809 million in training (52,000-plus 
activities) documented in the Military Training Report, 97% fell under 
security assistance mechanisms funded through the foreign operations 
subcommittee while the remaining 3% fell under DoD authorities. The 
vast majority of the 97% was provided through the Foreign Military 
Sales (FMS) system, with financing from various sources including host 
nation funds, Foreign Military Financing (FMF) grants, FMF loans, and 
International Narcotics and Law Enforcement (INL) funds. IMET grants 
accounted for about 6% of the $809M.
                            egypt arms deal
    Question. We've just heard this morning that Defense Secretary 
Cohen and the Egyptian government have reached an agreement on a new 
arms package. Press reports have indicated that the total amount of the 
deal would be $3.2 billion. Can you give us any details on this arms 
sale?
    Answer. The Clinton Administration agreed to Egypt's request for 24 
additional F-16s and 200 additional M1A1 tanks and to provide pricing 
and availability (P&A) data for Patriot PAC-3 missiles. The total 
estimated price of the request is $3.035 billion. We have initiated 
congressional notification for the 24 F-16s. The additional tanks and 
Patriot missiles will require formal letters of request from Egypt. 
Following the letters of request, a formal congressional notification 
will take place.
    Question. Would part or the entire sale be financed through the 
Foreign Military Financing Program, or would this be a commercial 
transaction?
    Answer. The entire sale will be financed through the Foreign 
Military Financing Program.

            Questions for the Record Submitted by Mr. Forbes

                       security assistance policy
    Question. Do you believe that Central Asia should be a priority for 
security assistance, and what steps would you take to facilitate the 
integration of the Central Asian states into an arrangement that would 
be beneficial to NATO and the U.S.?
    Answer. U.S. objectives in the New Independent States (NIS), 
including Central Asia, include: (1) reducing the dangers associated 
with weapons of mass destruction technologies, and preventing WMD 
proliferation; (2) strengthening the sovereignty, independence, and 
western orientation of the NIS; (3) encouraging the evolution of each 
country's armed forces as a pillar of a democratic, free-market state; 
and (4) promoting regional cooperation and participation in European 
security systems.
    Department of Defense engagement in Central Asia is heavily 
dependent on security assistance programs to further our interests in 
the areas of counterproliferation, defense reform, and regional 
cooperation. Through these, and other defense and military contacts, 
the DoD aims to develop close and lasting bilateral cooperation with 
the defense establishments of Central Asia. We are, however, cognizant 
that future defense cooperation could be jeopardized by a lack of 
progress in the areas of democratization and respect for human rights.
    Additionally, the Department promotes close cooperation between 
Central Asia and NATO. The principal vehicle for this cooperation is 
the Partnership for Peace (PFP). All Central Asian states but 
Tajikistan are PFP partners, and Tajikistan has indicated that it will 
join the program this year. A key source of Department support for PFP 
participation is Warsaw Initiative funding, which includes a Foreign 
Military Financing (FMF) component. Warsaw Initiative funds have been 
critical to the development of the Central Asian Peacekeeping Battalion 
(CENTRASBAT), which was formed by Kazakhstan, Kyrgyzstan, and 
Uzbekistan and is focused on (1) fostering regional cooperation, (2) 
developing NATO interoperability, and (3) developing peacekeeping 
capabilities that meet international standards.
    Question. Do you foresee a change is these activities (security 
assistance) as more countries join NATO and the Chinese threat grows?
    Answer. If and when NATO agrees to an additional enlargement, the 
Defense Department will review the ramifications on our overall 
security assistance policy. For now, the Defense Department has 
recommended to the State Department that grant foreign military 
assistance continue to the three newest NATO members (Poland, Hungary, 
and the Czech Republic) for several more years. We believe the aid 
should continue at the modest levels of the past four years, during 
which time the Warsaw Initiative provided an average of roughly $10-12M 
per year per country. The military assistance would focus on increasing 
the degree of NATO interoperability in areas such as C3, air defense, 
logistics, and English language training.
    The security assistance program in East Asia has been a critical 
element of our regional engagement strategy, enabling us to build trust 
and interoperability, improve the ability of our friends and allies in 
the region to defend themselves, and enhance our ability to conduct 
joint operations with regional partners. In so doing, the program has 
played an important role in deterring agreesion and promoting regional 
stability. We will continue to rely on security assistance as a means 
of shaping events to promote and protect American interests and of 
building a capacity in the region to respond decisively should there be 
a threat to those interests.
    Question. What countries constitute your major areas of activity at 
the present?
    Answer. The vast majority of Foreign Military Financing (FMF) is 
used to help the parties engaged in the Middle East peace process to 
meet their legitimate security needs. This assistance supports the 
long-standing U.S. policy goal of seeking a just, lasting and 
comprehensive peace between Israel and its Arab neighbors. By helping 
Israel maintain its qualitative edge, by facilitating the modernization 
and readiness of Jordan's armed forces, and by fortifying Egypt's armed 
and naval forces, FMF assistance enhances the overall stability and 
security of these countries and advances U.S. regional stability 
objectives. These regional objectives include checking the spread of 
weapons of mass destruction and their delivery systems; garnering 
support for enforcing U.S. sanctions on Iraq, Iran, and Libya; and 
facilitating U.S. access to the region in times of crisis.
    FMF grants and loans also provide critical support to assist 
Poland, Hungary, and the Czech Republic in taking the necessary steps 
towards full integration with NATO, including meeting their Target 
Force Goals. Funds provided under the PFP program help recipient 
nations acquire the skills and equipment necessary to continue the 
transition of their military institutions toward Western-oriented 
doctrines, structures and operations, including democratic control of 
the military.
    Additionally, FY2000 FMF grant programs will:
    Sustain Caribbean defense and maritime forces, allowing these 
island nations to maintain small professional forces essential to 
regional peace and security and to supporting U.S. objectives in the 
region;
    Support, in conjunction with Peace Keeping Operations (PKO) funds, 
efforts by the African Crisis Response Initiative to improve and expand 
the capabilities of African militaries to respond to limited peace and 
humanitarian crises on the continent; and
    Assist selected countries in improving their peacekeeping 
capabilities with emphasis on communication systems and peacekeeping 
education and training programs.
    Question. Could you outline the Administration's policy on security 
assistance from the perspective of DoD?
    Answer. The security assistance program enables us to stay engaged 
in the world and shape events to protect and promote American 
interests. Enhancing the capabilities of our friends and allies to 
address conflicts, humanitarian crises, and natural disasters makes it 
less likely that American forces will be called upon to respond to 
regional problems; it also limits their involvement when they are. 
Additionally, the security assistance program ensures that when U.S. 
forces are employed, foreign militaries can work with them more 
efficiently and effectively rather than be hobbled by mismatched 
equipment, communications, and doctrine.
    Our continued engagement promotes the principles of democracy, 
respect for human rights, and the rule of law. One of our most cost-
effective security assistance programs supporting this objective is 
International Military Education and Training. IMET provides us with 
access to the future leadership of foreign militaries and provides 
foreign military and civilian defense personnel educational 
opportunities at senior service staff colleges and technical training 
in such areas as maintenance and aircraft engine repair. The IMET 
program fosters military-to-military relations and promotes military 
professionalism. These benefits are key to our gaining the cooperation 
of others to provide access and to conduct joint operations, as well as 
to improving the ability of our friends and allies to defend 
themselves.
    The vast majority of security assistance funding is in the Foreign 
Military Financing (FMF) program. FMF supports U.S. regional security 
goals by enabling key friends and allies to improve their defense 
capabilities through financing acquisition of U.S. military articles, 
services, and training. FMF promotes U.S. national security interests 
by strengthening coalitions with friends and allies, cementing 
cooperative bilateral foreign military relationships, and enhancing 
interoperability with U.S. forces. Because FMF monies are used to 
purchase U.S. military equipment, American workers and our industrial 
base directly benefit from our security assistance program as well.

           Questions for the Record Submitted by Mr. Kingston

                                  kedo
    Question. I would just add that, in light of this massive increase 
and our strong concerns about KEDO to begin with, I think it may be 
time for this subcommittee to receive a separate, formal briefing from 
DoD, IAEA, State, and whoever else is appropriate on North Korea, its 
compliance with the terms of the Agreed Framework and what exactly is 
going on underneath those North Korean mountains. I'll put that 
suggestion before the Chair and leave it open for any reaction of you 
may have.
    Answer. The Department of Defense believes that consultations and 
briefings with the Appropriations Subcommittee on U.S. policies toward 
North Korea, including the Agree Framework, contribute significantly to 
achieving our security objectives on the Korean Peninsula. We would be 
pleased to join other Administration agencies in meeting with the 
Subcommittee on this important security challenge.
                   african crisis response initiative
    Question. Will you tell us a little more about the status of the 
ACRI? Has it participated in or conducted any actual peacekeeping or 
interceding operations or is it still being formed and trained?
    Answer. The program's long-term objective is to create an 
interoperable African capacity of up to 12,000 military personnel 
available for continental peacekeeping and humanitarian assistance 
contingencies. To date, six African states have been the beneficiaries 
of trained battalions: Ghana. Benin, Uganda, Mali, Malawi, and Senegal. 
The program is scheduled to train a new battalion in Cote d'Ivoire 
later this year. By all accounts, the training has been well received 
and highly successful.
    Under a mandate established by the Economic Community of western 
African States (ECOWAS), Mali and Ghana have provided ACRI-trained 
units as part of the ECOMOG peacekeeping force in Sierra Leone. Benin 
provided ACRI-trained troops as part of an ECOWAS-approved force in 
Guinea--Bissau. In both of the operations, the ACRI-trained soldiers 
reportedly appear to have performed well.
    Question. We have been providing funding for this initiative (ACRI) 
for at least two years now. What assessments have you made thus far on 
its impact versus its potential?
    Answer. ACRI is a training initiative, not a standing military 
force. Operational deployment of ACRI-trained troops is a sovereign 
decision in response to a request from the United Nations, the 
Organization of African Unity (OAU), or a sub-regional organization 
such as ECOWAS. The recent open and transparent decisions of Mali and 
Ghana to participate in peacekeeping operations in Sierra Leone and of 
Benin to participate in Guinea-Bissau clearly indicate the value of the 
ACRI as a regional peace and security tool. The professionalism 
displayed by these units proves that ACRI training is having a positive 
impact.

            Questions for the Record Submitted by Ms. Pelosi

                           imet for pakistan
    Question. What is the Administration's position on whether IMET 
training in Pakistan should continue in 2000?
    Answer. The Department of Defense is keenly aware of the 
sensitivities of this program with Congress. The Administration 
continues to believe that IMET is an extremely cost-effective means of 
building U.S. influence with the military forces of recipient countries 
and of strengthening democratic civilian control of the military. This 
is particularly important in Pakistan, where the armed forces are the 
strongest national institution. In Pakistan's case, we have tailored 
the program to restrict attendance to schools offering Professional 
Military Education (PME) or Expanded IMET subjects. The U.S. Embassy in 
Islamabad will screen all candidates to exclude any on whom we have 
credible evidence of gross human rights abuses, drug trafficking, 
corruption, participation in Pakistan's nuclear weapons program, or 
other activities not consistent with U.S. foreign policy goals. We look 
forward to continuing this program in FY 2000.
                     military training report/jcet
    Question. Why is all the JCET information classified?
    Answer. The Special Operations Commands provided the JCET 
information in classified form to the Office of the Secretary of 
Defense. In our effort to deliver the report to Congress in a 
reasonably timely fashion, we did not have sufficient time to complete 
a declassification review.
    Subsequently, during the 23 March hearing on the Military Training 
Report, Under Secretary of Defense for Policy Walter B. Slocombe 
provided the House Appropriations Subcommittee on Foreign Operations 
the JCET information in an unclassified form for all of the FY 98 and 
first quarter FY99. Copies of the unclassified JCET information were 
subsequently delivered to all other original recipients of the Training 
Report.
    Question. Much of the JCET activity has been publicly reported in 
the press, particularly in the case of Indonesia. Can you comment on 
future plans for JCET training?
    Answer. All Joint Combined Exchange Training (JCET) activities for 
Indonesia were suspended on May 8, 1998, and have not resumed. The 
overall JCET program continues elsewhere and regional CINCs continue 
planning for future JCETs as part of their normal training schedule. 
Resumption of JCET activities in Indonesia will require approval of the 
Secretary of Defense.
    The FY99 Defense Authorization Act requires that the Secretary of 
Defense provide prior approval for all activities conducted under the 
authority of 10 U.S.C. 2011. The Secretary's decision to approve 
proposed JCET events is predicated on the Embassy verifying that the 
State Department does not possess credible information that members of 
the units with whom DOD plans to train have committed gross human 
rights violations. The Secretary's review and approval process also 
looks closely at a host nation's internal stability as well as key 
regional policy concerns.
    Question. What is the foreign policy justification for it?
    Answer. The Joint Combined Exchange Training (JCET) program, 
conducted under 10 U.S.C. 2011 authority, contributes significantly to 
the Administration's foreign policy objectives. However, the primary 
purpose of the JCET program is to train U.S. Special Operations Forces 
(SOF) personnel thereby increasing overall U.S. military readiness.
    U.S. regional CINCs rely on SOF to provide unconventional military 
options for a wide variety of missions in theater. For example, Special 
Operations Command Pacific (SOCPAC) at H.M. Camp Smith, Oahu, Hawaii 
serves as the SOF component command for U.S. Pacific Command (USPACOM). 
SOCPAC engagement focuses on organizing and training indigenous forces 
in support of USPACOM's strategic objectives. U.S. SOF involved in 
these activities enhance their foreign language and instruction skills, 
expand their knowledge of foreign environments and cultures, and hone 
their combat and combat support capabilities. Moreover, they improve 
their capabilities to participate in humanitarian activities, 
peacekeeping, non-combatant evacuations, and coalition operations.
    U.S. military forces participating in JCET activities shape the 
international security environment in ways that promote peace, 
stability and human rights. Moreover, JCET events demonstrate American 
military capabilities, underscore our continued commitment to regional 
stability and to deterring potential aggressors, build trust and force 
interoperability, and facilitate our access to a host nation's key 
military personnel and support facilities. U.S. SOF gain valuable 
training and overseas experience, which has proven critical to 
maintaining and enhancing their special skills and readiness. In the 
process, the interaction with foreign military counterparts afforded by 
the JCET program provides an opportunity for U.S. forces to impart a 
sense of military professionalism reflective of our nation's democratic 
principles and traditions.
    JCET activities clearly promote our foreign policy objectives as 
they fulfill their primary purpose of increasing U.S. military 
readiness. They improve a host nation's military skills and 
professionalism, while promoting bilateral mil-to-mil dialogue. 
Moreover, they are a principal means for DOD to develop and sustain 
intelligent, experienced, and resourceful military personnel who have 
the skills to interact successfully with foreign military organizations 
and governments, U.S. country teams and non-government organizations.
    Question. What role did it serve in Indonesia, is it still going on 
there, and how does the extensive US role with the intelligence forces 
and the Army square with the killing of civilians during the 
disturbances?
    Answer. JCETs have not been conducted in Indonesia since May 8, 
1998.
    Prior to this date, the primary purpose of Special Operations 
Command Pacific (SOCPAC) Joint Combined Exchange Training (JCET) 
activities in Indonesia was to train U.S. Special Operations Forces 
(SOF) and maintain their highest possible level of readiness. U.S. SOF 
involved in JCET events in Indonesia, under 10 U.S.C. 2011 authority, 
enhanced their foreign language and instruction skills, expanded their 
knowledge of Indonesian culture, and improved U.S. access to the 
Indonesian military. They also had an opportunity to impart a sense of 
military professionalism reflective of our nation's democratic 
principles and traditions and enhance our bilateral mil-to-mil dialogue 
with Indonesia.
    U.S. Pacific Command (USPACOM) relies on SOCPAC to provide 
unconventional military options for a wide variety of in-theater 
missions. In turn, USPACOM relies on JCETs to sharpen critical SOF 
Mission Essential Task List skills, both at the unit and Joint levels. 
JCET-trained U.S. SOF display the flexibility to adapt throughout 
CINCPAC's vast area of responsibility and have the tactical precision 
required for operations with far-reaching political consequences. The 
JCET program in Indonesia contributed directly to USPACOM's strategic 
goals of shaping the regional security environment and building a 
capacity to respond effectively should there be a threat to American 
interests in the region.
    DoD policy, which was enacted into law in the FY99 Defense 
Appropriations Act, prohibits U.S. troops from training foreign 
security units whose members have committed gross violations of human 
rights, ``unless all necessary corrective steps have been taken.''
    Joint Combined Exchange Training (JCET) events provide a principal 
means for U.S. military forces to impart to host nation security forces 
a sense of military professionalism reflective of our nation's 
democratic principles and traditions. During JCET activities, U.S. 
forces emphasize the role the military must play in protecting and 
promoting respect for human rights, both in conventional and 
unconventional situations.
    Question. To what extent should Congress be involved in decisions 
to deploy US troops in a training capacity for JCET activities?
    Answer. Congress has recently provided extensive guidance on Joint 
Combined Exchange Training (JCET) activities. As amended, 10 U.S.C. 
2011 Section 2011 requires that all training activities carried out 
under its authority receive prior approval from the Secretary of 
Defense. Section 8130 of the FY99 Defense Appropriations Act prohibits 
DoD from using funds appropriated to train foreign security forces if 
the State Department provides credible information that a member(s) of 
the unit(s) DoD plans to train have committed gross human rights 
violations, unless all necessary corrective steps have been taken. 
Should the Secretary of Defense exercise the waiver authority granted 
him by Section 8130, he must submit a detailed report within 15 days on 
the purpose and duration of the training to be provided. Each of these 
provisions ensures that the JCET program has appropriate senior 
civilian oversight and is conducted in a manner consistent with U.S. 
national security and foreign policy interests.
                          human rights vetting
    Question. Are there different standards for vetting and why?
    Answer. There is only one standard for vetting.
    ``Vetting'' is the process by which the available data on a host 
nation's security forces, and members of such forces, is reviewed for 
information on human rights violations. DoD does not conduct the 
vetting process. ``Vetting'' is done by the relevant U.S. embassy and 
starts when the host government identifies a security force or 
individual(s) to receive U.S. training or equipment or to train with 
U.S. forces. The overall process is the same from embassy to embassy, 
although different ambassadors may establish particular internal 
procedures or assign vetting responsibilities differently within their 
respective country teams. Once an embassy has reviewed all available 
human rights information, it provides the results to appropriate DoD 
components.
    As noted above, the evaluation of human rights information--through 
the ``vetting'' process--is the same under all currently applicable 
statutes. However, methods for addressing human rights problems that 
may be identified during the vetting process differ slightly under sec. 
568 of the FY99 Foreign Operations Appropriations Act and sec. 8130 of 
the FY99 Defense Appropriations Act. These two processes are described 
in detail in Question 2.
    Question. Describe both the DoD process and the Leahy provision 
process.
    Answer. As noted in Question 1, the human rights review or 
``vetting'' process is the same for security assistance provided under 
foreign operations authorities and for DoD-funded training. ``Vetting'' 
by the relevant U.S. embassy starts when the host government identifies 
a security force or individual(s) to receive U.S. training or 
equipment, or to train with U.S. forces. After reviewing all available 
human rights information, the U.S. embassy provides the results to 
appropriate DoD components.
    If the Embassy determines that units or individuals selected for 
U.S. training have committed gross human rights violations, one of two 
processes will ensue.
    Under sec. 568 of the FY99 Foreign Operations Appropriations Act, 
the State Department will not dispense security assistance unless the 
Secretary of State determines and reports to Congress that the host 
government is taking effective measures to bring the perpetrators to 
justice. If training funds are withheld pursuant to sec. 568, the 
Secretary of State will inform the host government of the basis for the 
decision and, ``to the maximum extent practicable,'' will assist the 
host government in taking effective measures to bring those responsible 
to justice. Until these actions are completed, security assistance may 
not proceed.
    Section 8130 of the FY99 Defense Appropriations Act enacted into 
law existing policy that prohibits use of DoD funds to train foreign 
security units whose members have committed gross violations of human 
rights. If DoD receives credible information from the State Department 
that foreign security forces or members of the unit(s) DoD was planning 
to train have committed gross violations of human rights, the training 
will not proceed unless all necessary corrective steps have been taken. 
``Corrective steps'' may include adjusting host nation participation, 
either by training with security unit(s) not implicated in gross human 
rights violations or by removing the identified human rights 
violator(s) from the unit(s) to be trained. Once such corrective steps 
have been taken, DoD may proceed with the training.
    The Department will apply the ``corrective steps'' standard 
carefully. DoD procedures require the U.S. ambassador to concur that 
the corrective measures taken by host nation security forces are 
adequate. In addition, all training conducted in the wake of such 
corrective measures must be reported to the Office of the Secretary of 
Defense. These safeguards will ensure rigorous implementation of the 
``corrective steps'' standard.
    DoD policy, reflective of the standard set forth in sec. 8130 of 
the FY99 Defense Appropriations Act, is appropriate for DoD-funded 
training because the primary beneficiaries of combined training 
activities often are U.S. military personnel and readiness. Moreover, 
many of these training events strengthen important U.S. programs such 
as humanitarian demining and counterdrug support. In all its engagement 
activities, the U.S. military sets a high professional standard for 
counterpart militaries, emphasizing respect for human rights and the 
proper role of the military in a democracy.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                             resources/dod
    Question. How do you think the extent of foreign military training 
has affected readiness?
    Answer. The regional CINCs consistently place training among their 
highest priorities to execute their regional engagement strategies. 
They often rely on foreign military training to ensure the highest 
possible level of military readiness.
    Regional CINCs rely on Special Operations Forces (SOF) to provide 
unconventional military options for a wide variety of in-theater 
missions. In turn, the CINCs use foreign military training--whether 
Joint Combined Exchange Training (JCET), humanitarian demining training 
and counterdrug training--to sharpen critical SOF Mission Essential 
Task List skills, both at the unit and Joint levels. U.S. forces 
involved in these programs enhance their foreign language and 
instruction skills, expand their knowledge of foreign environments and 
cultures, hone their combat and combat support skills, and improve U.S. 
access to key foreign military personnel and support facilities. 
Foreign military training programs contribute directly to a CINC's 
strategic goals of shaping the regional security environment and 
building a capacity to respond effectively should there be a threat to 
American interests in this area of responsibility.
    Question. What is the rational for DoD funding of this vast foreign 
training?
    Answer. The DoD budget funded only a small portion of the total 
training costs borne by the United States that are included in the 
Military Training Report. Of the over 52,000 activities listed in the 
Report, less than three percent fell under DoD authorities, including 
activities executed under drawdown authorities which are funded by DoD. 
The remaining 97 percent fell under security assistance mechanisms 
(e.g., IMET, FMS). Of the $809 million in total training, IMET grants 
accounted for about six percent and DoD authorities for about seven 
percent, or $57 million. The balance, and by far the vast majority, was 
provided through the Foreign Military Sales system, with financing from 
various sources including host nation funds, Foreign Military Financing 
(FMF) grants, FMF loans, and International Narcotics and Law 
Enforcement (INL) funds.
    DoD-funded training provides the United States a high return on its 
investment. In FY 1998, about $12.4 million funded Joint Combined 
Exchange Training (JCET) activities conducted by Special Operations 
Forces (SOF) under 10 U.S.C. 2011 authorities. The JCET program 
produces superbly trained and highly qualified SOF who can implement 
critical aspects of the CINCs' theater engagement strategies and 
promote U.S. national security interests. The DoD-funded counterdrug 
program develops host nation forces' capabilities to engage actively in 
the counterdrug campaign. The humanitarian demining program develops 
host nation capabilities to manage national demining centers, to locate 
and destroy landmines, and to develop public information programs that 
promote mine awareness.
                         school of the americas
    Question. In the aftermath of the discovery of manuals used at the 
School of the Americas, the DoD committed to improve the oversight of 
the curriculum by issuing a directive on training programs meeting 
human rights standards. Has that directive been issued? Provide a copy 
of the directive for the record.
    Answer. DoD took immediate corrective action when we discovered in 
1991 that six instructional manuals the School of the Americas was 
using contained 24 inappropriate statements. All of the manuals were 
destroyed, with the exception of one set, which was set to the DoD 
General Counsel's Office.
    The School's Commandant has made promoting human rights awareness a 
critical foundation of the School's mission. The School's formal 
mission statement reads: ``Provide doctrinally sound, relevant military 
education and training to the nations of Latin America, promote 
democratic values and respect for human rights and foster cooperation 
among multinational military forces.'' Eight hours of human rights 
training is mandatory for each student attending the School.
    Numerous internal and external reviews and inspections of the 
School of the Americas have consistently noted a measurable improvement 
in the School's awareness of and instruction in human rights. Several 
organizations have provided oversight of the School's training 
materials including the United States Army Infantry Center, the General 
Accounting Office, the DoD Inspector General, the Department of the 
Army Inspector General, the United States Army Training and Doctrine 
Command, and U.S. Southern Command.
    In light of the measures taken, no formal DoD directive on training 
programs meeting human rights standards was required or issued, but DoD 
did issue a policy memorandum requiring that all intelligence and 
counterintelligence instruction of foreign nationals be consistent with 
that given to U.S. military service members. This policy has been fully 
implemented at the School.
    Furthermore, the Secretary of Defense annually certifies that 
instruction and training provided by the School of the Americas is 
fully consistent with the training and doctrine imparted by DoD 
institutions whose primary purpose is to train U.S. military personnel. 
This pertains, in particular, to the observance of human rights.
    Question. What steps have been taken to ensure that all curriculum 
developers and instructors are aware of the directive and are complying 
with it?
    Answer. The School of the Americas is actively committed to 
continued improvement in its human rights instruction. The School's 
Commandant has made promoting human rights awareness a critical 
foundation of the School's mission. The School's formal mission 
statement reads: ``Provide doctrinally sound, relevant military 
education and training to the nations of Latin America, promote 
democratic values and respect for human rights and foster cooperation 
among multinational military forces.''
    All courses taught at the School must include a human rights 
awareness component. Each course description that appears in the 
School's catalog highlights human rights issues. Every instructor 
receives a mandatory sixteen-hour block of human rights instruction as 
part of the Instructor Training Course mandated by the U.S. Army 
Training and Doctrine Command. The latest annual training guidance, 
issued by the School's Commandant in June 1998, explicitly states one 
of the School's six goals is to ``Continue development of our Human 
Rights Training Program and be recognized as the premier Human Rights 
training institution in DoD.''
    Question. Which IMET courses beyond expanded IMET contain a human 
rights and/or civil military relations component?
    Answer. Per se, there is no such thing as an IMET course. IMET is a 
source of funding used to support the costs of training international 
students in a wide variety of DoD-sponsored courses. With few 
exceptions, almost all courses available to U.S. military students and 
over 100 courses under expanded IMET (E-IMET) are available through 
IMET funding. These courses of instruction fall into three broad 
categories:
    1. Professional Military Education includes command an staff 
colleges, postgraduate education and other instruction directed toward 
senior officers and mangers. Almost all of these courses include 
education in human rights and or civil-military relations.
    2. English language training is designed to ensure students achieve 
prescribed levels of English proficiency needed to complete their 
follow-up courses successfully. Topics of human rights and civil-
military relations are used throughout the English language curricula.
    3. Traditional military training encompasses technical or general 
skills, but does not include specific training in human rights or 
civil-military relations. (Note: this category of training composes 
only about 25% of IMET-funded programs.) These students are exposed to 
U.S. values in human rights and civil-military relations through the 
Informational Program.
    The Informational Program (IP), a key component of the 
international student's experience in the United States, encompasses a 
variety of activities designed to enhance awareness and functional 
understanding of human rights and the American democratic way of life. 
This program is available to all international students and can be 
financed through IMET, FMF, or country national funds.
    The IP is designed to ensure that international students return to 
their homelands with an understanding of the responsibilities 
governments, militaries and citizens have to protect, preserve, and 
respect the rights of every individual. IP activities can be powerful 
tools for presenting U.S. institutional values to international 
students. DSCA continues to work with the security assistance training 
community to update and focus IP activities.
    International Military Student Officers (IMSOs) must arrange 
activities and events for international students that clearly support 
at least one of the following areas of concentration. (1) 
internationally recognized human rights, as outlined in the Universal 
Declaration on Human Rights; (2) the democratic ideals of an elected 
government and effective civil-military relations; (3) the roles and 
interrelationships of a culturally, ethnically, economically, and 
socially diverse population in a democratic society; and (4) the role 
of the U.S. free enterprise system in a democratic society.
    IMSOs arrange events that involve contact with a diversity of 
groups that contribute to a vibrant civil society. These include 
various groups such as civil rights, environmental preservation, 
citizen tax review, anti-war and other organizations. Visits to and 
briefings by these and other non-governmental organizations emphasize 
how accountability in a democracy serves to preserve the human rights 
and other freedoms of each citizen. IMSOs are required to complete 
assessment reports for all IP events and to ensure that all students 
complete evaluation forms. These forms are maintained on file.
    Question. Provide an assessment of the performance of School of 
Americas graduates during 1997 and 1998.
    Answer. The U.S. Army School of the Americas graduated 946 foreign 
and U.S. military students in 1997 and 778 students in 1998. These 
graduates represented the following countries: Argentina, Bolivia, 
Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, 
Guatemala, Honduras, Mexico, Paraguay, Peru, Uruguay, the United 
States, and Venezuela. Course offerings in 1997 and 1998 included the 
following Expanded IMET courses: command and general staff officer 
course, civil-military operations, and resource management. Other 
course offerings included peace operations, counterdrug operations, 
medical assistance, countermine operations, cadet leadership 
development engineer, cadet leadership development logistics, battle 
staff operations, joint operations, and NCO development.
    The U.S. does not ``track'' foreign personnel after completing 
their U.S. training. Formal tracking of graduates would be logistically 
complex and costly--and perhaps impossible. The U.S., in all our 
training activities could graduate over 30,000 foreign students in any 
given year. Moreover, it is doubtful we could obtain the information 
necessary for career-long tracking from foreign citizens who have no 
continuing formal association with the U.S. government. Even if it were 
feasible to collect this type of information, we do not believe it 
would be worth the huge administrative burden, which would fall most 
heavily on already stretched embassy staffs.
    We do have some information about certain ``alumni'' who have 
established and maintained informal relationships with U.S. personnel. 
Graduates who have done well, often rising to very high positions in 
their governments, frequently credit U.S. training as a key element in 
their career development. Examples from Latin America include the 
Minister of Defense of Venezuela; the Minister of National Defense of 
Ecuador; and the Commander in Chief of the Armed Forces of Honduras.
    There are sometimes reports of foreign officers charged with gross 
violations of human rights or other misconduct who have attended U.S. 
training at some point in their careers. We correctly condemn these 
individuals, but their misconduct must not cast doubt on all recipients 
who have received or may receive similar U.S. training.
    Question. Were any graduates implicated in human rights abuses 
during that time (1997 and 1998)? Provide the details of the violations 
or alleged violations for the record.
    Answer. The Department of Defense is not aware of any 1997 and 1998 
graduate from the U.S. Army School of the Americas who has been 
implicated in human rights abuses.
    Question. Describe how many students were enrolled in the Human 
Rights Train the Trainer course in 1998, and plans to offer it in 1999.
    Answer. In fiscal year 1998, the U.S. Army School of the Americas 
did not have any students who took the Human Rights Train the Trainer 
Qualification course. This same course has been made available to Latin 
American countries for fiscal year 1999, but there are currently no 
students scheduled for enrollment at this time.
    Question. What kind of ongoing, external oversight of the SOA 
curriculum is exercised beyond that done by the Board of Visitors? 
Provide for the record any recent relevant report by the Board of 
Visitors, and reports from any other external oversight body.
    Answer. Department of Defense and Department of the Army Inspectors 
General have recently conducted detailed inspections of the School. The 
DoD Inspector General conducted two inspections in 1997, while the Army 
Inspector General conducted a follow-up inspection in 1998. Results of 
these inspections point to a consistent improvement in human rights 
training and instructional oversight. Additionally, the United States 
Southern Command's (USSOUTHCOM) Human Rights Office has made numerous 
visits to the School of the Americas to evaluate whether its human 
rights training meets required standards, as well as to suggest 
improvements and enhancements to the training. Also, representatives 
for the Human Rights Office attend the School's quarterly Human Rights 
Committee meetings to offer insight on curriculum content and focus. A 
curriculum review team for USSOUTHCOM will again visit the School in 
mid-April for a top-to-bottom review of the curriculum. A copy of the 
DoD Inspector General's Report and inspection reports for the 
USSOUTHCOM Human Rights Office are attached for the record; the interim 
Army Inspector General's report will soon be available for final 
release.
            Questions for the Record Submitted by Mrs. Lowey
                                 israel
    Question. The U.S. has a vital national security interest in 
keeping Israel stable and secure, and our military assistance to Israel 
helps achieve that goal. In fact, the benefits of our military 
assistance to Israel stretch far beyond the borders of that country. 
Could you discuss how critical this aid is to the stability of the 
entire region?
    Answer. Providing Foreign Military Financing (FMF), not only to 
Israel but also to Egypt and Jordan who have concluded peace treaties 
with Israel, serves to build security, deter aggression, enhance 
stability and set a strong example of the fruits of peace. Our military 
assistance and R&D aid contributes directly to the development of 
advanced defensive systems such as the ARROW ATBM and various counter-
terrorism systems, which contribute to regional stability in the face 
of possible Weapons of Mass Destruction (WMD) aggression and terrorist 
acts.
                                 jordan
    Question. How has our military assistance helped Jordan in this 
capacity and how will the increase in military assistance requested in 
the Administration's supplemental and regular FY 2000 proposals further 
our goal of ensuring a stable and secure Jordan?
    Answer. Our military assistance to Jordan since the 1994 peace 
treaty with Israel has consisted of two major components--Foreign 
Military Financing (FMF) and DoD drawdown. FMF from 1996 through 1999 
was dedicated principally to the procurement of an F-16 squadron (16 
aircraft), representing a major step in modernization of the Jordanian 
Armed Forces and Jordan's largest procurement in nearly two decades. 
Beginning with the supplemental request for Jordan in FY99 (which 
includes $50M in FMF), we are working with Jordan to sustain and 
selectively modernize its aging inventory of U.S.-origin military 
equipment. Jordan has recently developed a five-year procurement plan 
that has been carefully coordinated with the Department of Defense to 
maximize both the utility of U.S. aid and the readiness of the 
Jordanian military. The Jordanian plan is largely focused on upgrades 
in anti-armor, ground mobility, and air defense. Although Jordan's 
overall defense needs exceed what we expect to provide, we are 
confident that our projected aid, if appropriated, will address the 
most critical needs and will give Jordan a more capable deterrent 
against aggression from Syria or Iraq.
    DoD also has been directed to conduct three drawdowns of equipment 
for Jordan ($100M in FY 96, $25M in FY 98, and $25M in FY 99). Although 
drawdowns were initially a useful tool, the decline in DoD stocks has 
severely restricted our ability to conduct further drawdowns without 
impacting readiness. Additionally, drawdown equipment is typically old 
and in poor condition; the burdens of maintaining it often outweigh the 
benefits of having it. In short, DoD prefers not to conduct another 
drawdown for Jordan after FY 99 and considers FMF as the most efficient 
means of assistance.
                                 egypt
    Question. Can you please update us on the proposal to create an 
interest bearing account and provide some rationale for it?
    Answer. The Department of State, in conjunction with DSCA, drafted 
language for Title III of the FY00 Foreign Operations, Export 
Financing, and Related Programs Appropriations Act, which has been 
included in the President's FY00 Budget submission to Congress. This 
language authorizes the disbursement of up to $470 million of the total 
Foreign Military Financing funds made available to Egypt under this Act 
within 30 days of enactment of the Act or by October 31, whichever is 
later. The $470 million represents the amount of funds required to be 
on deposit to pay DOD contractors in the event of program termination. 
Termination liability was chosen as the benchmark because these funds 
are required to be on deposit should termination occur; but they are 
not needed for disbursement unless termination does occur.
    The IBA would be established, in the same manner as it is for 
Israel, with the Federal Reserve Bank investing in non-marketable 
foreign securities. Use of non-marketable foreign securities has no 
impact on the U.S. Treasury balance. Interest will be paid to the 
Government of Egypt interest-bearing account based on the amount of 
principal placed in the account. Current estimates indicate that 
interest earned would be $24 million per annum based on a principal of 
$470 million.
    The IBA will provide more program flexibility since the interest 
earned will be treated, subject to certain limitations, as Egyptian 
national funds. Currently, law and policy restrict the use of Foreign 
Military Financing (FMF) for specific purposes. Interest funds, while 
tightly controlled by the USG when earned with an FMF investment, will 
allow under limited circumstances for the funding of defense items with 
non-U.S. content; defense items for which DOD has no U.S. procurement 
source; the lease of defense articles; and defense items that would 
normally require an Arms Export Control Act (AECA) Section 42c 
determination. Because the interest funds are earned with an FMF 
investment and the use of FMF is restricted to specific purposes, the 
interest earned should only be used for the above specified defense 
purposes.
    The Administration strongly supports this proposal. Creation of an 
interest bearing account will accommodate our important strategic 
partner in light of the proposed decreases in Economic Support Funds 
and the increase in FMF for other countries in the region (mainly 
Israel). This proposal will help maintain some funding parity among our 
partners in the region.
    Question. I know that the state of Egypt's economy is out of your 
area of expertise, but I think it would be helpful for use to have an 
analysis of Egypt's economic needs vs. its military needs.
    Answer. Egypt's macroeconomic indicators have shown marked 
improvement since the early 1990s. Last year, Egypt enjoyed a GDP 
growth in excess of 5%, compared with 0.5% in 1992. Fiscal and monetary 
discipline reduced annual inflation to 4% from 20% in 1991 and built up 
Egypt's foreign exchange reserves to $20 billion--about 10 months of 
goods and services import coverage. In addition, Cairo trimmed its 
budget deficit from nearly 20% of GDP in 1991 to less than 1% 
currently, but fiscal pressures will make this rate difficult to 
maintain. Despite these generally positive signals, Cairo has been slow 
to make the market-based reforms necessary to sustain future growth. 
More far-reaching and consistent economic policy reforms would appear 
to be necessary to attract foreign investment at levels that are 
sufficient to provide jobs for Egypt's rapidly growing labor force.
    As with many developing countries, Egypt's military plays a role 
not only in defense of Egypt's border but also in providing internal 
stability that allows for steady progress of economic and social 
development. This stabilizing influence has been further enhanced as 
personnel in the Egyptian Armed Forces have gained increased exposure 
to U.S. culture and democratic ideals through training and interaction 
with U.S. military and civilians resulting from Egypt's replacement of 
its Soviet-era equipment with modern Western, primarily U.S., 
equipment.
    Considering the total picture, our analysis is that diversion of 
Egypt's military aid to economic aid would have little direct impact on 
accelerating Egypt's economic development, which will depend on Cairo 
undertaking additional market-based reforms. Such diversion, however, 
would undermine its essential military modernization and thereby the 
internal and regional stability upon which economic development is so 
dependent.
    Question. Perhaps you can let us know what increased military 
threat Egypt is facing that justifies this request.
    Answer. Egypt continues to face a security threat from Libya to its 
west and Sudan to its south. However, the Administration's support for 
creating an Egyptian interest bearing account does not hinge solely on 
our concern about an increased military threat. Rather, an interest 
bearing account would be a modest symbol of U.S. commitment to Egypt's 
military modernization and recognition of the important role Egypt 
plays in our military strategy in the Middle East and as a strong and 
consistent advocate of peace and stability in the region.
                     military training report/jcet
    Question. Can you justify your decision to classify the JCET 
section?
    Answer. The Special Operations Commands provided the JCET 
information in classified form to the Office of the Secretary of 
Defense. In our effort to deliver the report to Congress in a 
reasonably timely fashion, we did not have sufficient time to complete 
a declassification review.
    Subsequently, during the 23 March hearing on the Military Training 
Report, Under Secretary of Defense for Policy Walter B. Slocombe 
provided the House Appropriations Subcommittee on Foreign Operations 
the JCET information in an unclassified form for all of the FY98 and 
first quarter FY99. Copies of the unclassified JCET information were 
subsequently delivered to all other original recipients of the Training 
Report.
                             latin america
    Question. Can you update us on the status of our policy with regard 
to arms sales to Latin America?
    Answer. Our policy for Latin America is consistent with U.S. policy 
toward the rest of the world. In making case-by-case decisions on arms 
transfers, our policy takes into account our overall goals of 
restraint, strengthening democracy and civilian control of the 
military, avoiding arms races and maintaining regional stability, as 
well as the economic impact of any transfer and encouraging a focus on 
economic and social development.
    Some Latin American countries are addressing the need to modernize 
their militaries, including institutions, strategies, force structures, 
and replacement of obsolescing equipment. We have encouraged 
democracies to professionalize their armed forces and engage in long-
term defense planning. Many currently have obsolete equipment that is 
difficult and expensive to maintain, and must be replaced in the near 
future. These modernization efforts enable militaries to meet the 
requirements of changing missions within limited budgets and reinforce 
the democratization process. The trend in security relations between 
Latin American countries is toward greater cooperation, not 
competition, and our ability to work with them on security matters has 
facilitated this trend.
    A significant goal of our policy is to ensure that defense 
modernization occurs within reasonable economic constraints and with 
restraint. As countries continue to review their budgets, missions, and 
requirements, we are willing to work with them to meet legitimate 
defense requirements, as we do for friends and allies worldwide.
    We have seen no significant increase in requests from the Latin 
American countries since we normalized our policy toward them, even 
prior to the economic downturn. This region of the world has 
historically spent less than other regions on its defensive needs, and 
we expect this will continue to be the case, even with an improved 
economy. The major sales of advanced weaponry currently pending in the 
region are the possible sale of fighter aircraft to Chile and Brazil. 
The Government of Chile is considering U.S. F-16 and F/A-18 fighter 
aircraft, the Swedish Grippen, and the French Mirage. Brazil, while not 
as far along in the process of replacing its antiquated fighter 
aircraft, has requested technical data on the F-16 and F/A-18. 
Argentina's modernization program has been very modest and has 
consisted primarily of U.S.-origin Excess Defense Articles and used A-
4s purchased from the United States.
                                           Tuesday, March 23, 1999.

                        MILITARY TRAINING REPORT

                               WITNESSES

WALTER B. SLOCOMBE, UNDER SECRETARY OF DEFENSE FOR POLICY
ERIC D. NEWSOM, ASSISTANT SECRETARY OF STATE FOR POLITICAL-MILITARY 
    AFFAIRS

                 Chairman Callahan's Opening Statement

    Mr. Callahan. Thank you. This afternoon we are holding a 
hearing on foreign military training. The focus of the hearing 
will be the four-volume report issued to the committee on March 
the 5th, by the administration, pursuant to Section 581 of our 
1999 Foreign Operations Act. The report also included a 
classified annex.
    The report includes training that was conducted by the 
Department of Defense during fiscal year 1998 and training 
proposed for fiscal year 1999. It specifies 51,000 unclassified 
training activities and 555 classified activities. The total 
dollar value of this training approaches $1 billion, but most 
of the training described in the report is provided as part of 
foreign military sales or FMS purchased by foreign Governments.
    These Governments use their own funds, in many cases, to 
purchase goods and services from American companies. The U.S. 
Government acts as their agent for these military sales and 
associated training activities. Less than $50 million consists 
of funds appropriated for the IMET program. The remaining 3 
percent of the $1 billion consists of training appropriated 
through the Defense Subcommittee. The military training under 
the jurisdiction of our subcommittee is authorized in the 
Foreign Assistance Act and the Arms Export Control Act.
    Similarly, it is my understanding that military training 
performed by DOD, using funds appropriated by the Defense 
Subcommittee, is authorized, in part, by Title X of the United 
States Code. Specifically, training by special operation 
forces, the so-called JCETs program, is authorized by Section 
2011 of Title X.
    As recently as October 17, 1998, the authority for such 
training was modified by the Congress through the Armed 
Services Committee. This law also requires an annual report on 
training by special forces. I am interested in ensuring proper 
oversight over the foreign military training funded through 
this subcommittee, and that is why I agreed to include Mrs. 
Pelosi's amendment on training in the 1999 Appropriation Bill.
    However, military training funded through the Defense 
Subcommittee and authorized by the Armed Services Committee, is 
the responsibility of those committees. Our subcommittee is the 
proper venue for reviewing the programs and activities under 
our jurisdiction, but I believe we have plenty to do without 
trying to manage programs over which we have no funding 
control.
    Today, we are pleased to have Walt Slocombe, under 
secretary of Defense for Policy, and Eric Newsom, assistant 
secretary of State for Political-Military Affairs, and we 
welcome both of you. I urge you to summarize your statements so 
members may have the opportunity to ask questions.
    We will now see if Mrs. Pelosi has an opening statement.

                     Ms. Pelosi's Opening Statement

    Ms. Pelosi. I do, Mr. Chairman. Thank you very much. I want 
to begin by thanking you, Mr. Callahan, for agreeing to hold 
this hearing on military training. We have invited our 
colleagues from the Defense Subcommittee to the hearing, and I 
do not know if they are coming. I talked to Chairman Lewis 
earlier. He might be here, and I do not know about Mr. Murtha. 
But I know Mr. Lewis has Intelligence Committee business right 
now, as do I.
    It is my hope that we can focus our discussion today on the 
process by which Congress, and particularly this subcommittee, 
is informed of decisions involving military training, which 
have clear foreign policy implications.
    I want to join you in welcoming our witnesses, Mr. 
Chairman, Secretary Slocombe, Under Secretary of Defense for 
Policy, and Secretary Newsom, the Assistant Secretary of State 
for Political-Military Affairs. Welcome, gentlemen.
    The issue of military training was discussed at some length 
recently at our security assistance hearing. Because our 
witnesses today are different witnesses, I want to make some of 
the points I made then and take the discussion into further 
detail.
    There is no doubt that the Defense Department has the 
authority to conduct foreign military training with their own 
funds. The theoretical justification for these authorities is 
that the training activity benefits U.S. military readiness. 
Mr. Slocombe's prepared statement also recognizes that, 
``Engaging foreign military establishments through a variety of 
training programs strongly supports U.S. national security and 
foreign policy interests.''
    The reality is that the growth in the breadth and scope of 
these activities has made military training a foreign policy 
tool. Congress does have input and has acted in the past in the 
instance of, for example, the School of the Americas, to 
prohibit or restrict foreign military training. It is the other 
forms of training into which Congress has little or no input 
about which I am concerned.
    The report, recently submitted, indicates that $800 million 
has been spent by DOD during the period covered by the report 
on 52,000--you referenced this, Mr. Chairman--different 
training activities. Of that amount, only $100 million spent 
for the IMET program has come under the direct review of this 
subcommittee. Although DOD has indicated that the vast majority 
of the remaining $700 million is funded through FMS or 
commercial means and that the majority of training deployments 
do not affect OP TEMPO, it is impossible to distinguish from 
the information contained in the report.
    The real issue for us today is whether Congress is 
adequately informed of DOD's decisions to deploy U.S. forces in 
training situations with clear foreign policy impacts. The 
reports submitted to Congress about those training activities 
are all structured as after-the-fact reporting of training 
deployments that have already taken place. In addition, the 
requirements imposed by the Defense Authorization Bill, as far 
as I know--correct me if this is not correct--only require 
internal DOD and State approval in JCET deployments.
    I intend, today, to discuss with you the appropriate role 
Congress should play in deciding on the scope and purpose of 
these deployments in cases where there are clear foreign policy 
implications. With all due respect to our colleagues on the 
Armed Services Committee, and I am glad to see our colleague, 
Mr. Lewis, from the Defense Appropriations Subcommittee, I 
believe Congress should be given enough information about these 
deployments before they take place so the rationale and 
judgments about their foreign policy implications can be made.
    There are obvious and clear benefits that our Special 
Forces derive from these deployments. Their job is to be ready 
to respond to the full spectrum of crises that face them in an 
uncertain future. However, when those training activities 
overlap with foreign policy, Congress, and this subcommittee 
specifically, has a right to be fully informed and consulted. I 
intend to pursue these issues in my questions and to use 
specific country examples to illustrate the dilemma which I 
have outlined. I look forward and, again, welcome our 
distinguished witnesses today.
    Thank you, Mr. Chairman.
    Mr. Callahan. Thank you. Chairman Lewis is a member of our 
subcommittee, but he is also chairman of the Defense 
Appropriations Subcommittee. As a result, Jerry, since most of 
the areas that we are talking about today include more of your 
monies than ours here on Foreign Operations, we welcome you to 
give an opening statement before we hear from the Secretaries.
    Mr. Lewis. Thank you, Mr. Chairman. I do not have an 
opening statement. I just might mention, however, that it has 
been a while since I have really focused upon these issues in-
depth. But something like 90 percent of the actual expenditures 
for such training is associated with foreign military sales, 
and that is a very, very significant item. Within the remaining 
10 percent, a significant piece of the remainder falls in my 
bill.
    But as we move forward to questions, I will be pleased to 
be able to participate.
    Mr. Callahan. Thank you.
    Ms. Pelosi. Mr. Chairman, if I may?
    Mr. Callahan. Yes?
    Ms. Pelosi. Was there some constraint on time for our 
witnesses?
    Mr. Callahan. I understand they have 9 meetings they have 
to go to----
    Mr. Newsom. Not me, but----
    Ms. Pelosi. I just wanted our colleagues to know that.
    Mr. Callahan. Mr. Slocombe.

                    Mr. Slocombe's Opening Statement

    Mr. Slocombe. Thank you, Mr. Chairman, Mrs. Pelosi, Mr. 
Lewis.
    I appreciate the opportunity to be here, and I apologize 
that because of the situation in Kosovo, which is coming to a 
head, there is a 4 o'clock White House meeting. I have got to 
get back to the building to be in a secure teleconference. Bob 
Keltz, who is the deputy director of the Defense Security 
Cooperation Agency, will be here and is fully informed as to 
all of these issues.
    I have a couple of, so-to-speak, administrative points. 
First of all, we were asked to reproduce the Military Training 
Report in a CD-ROM version. And while I doubt if it will get an 
award for the best record of the year, it is available here 
today.
    Ms. Pelosi. Thank you.
    Mr. Slocombe. Second, there was a question about 
classification. The ``S.O.F.'' community tends to classify all 
of its activities, and we asked them to review the material for 
the S.O.F.-run programs which have already happened. That 
information has all been declassified, so that the fiscal year 
1998 and the first quarter of fiscal year 1999 material has 
been declassified, and that is available here today.
    I just want to make one point about the scale of activities 
here. As I think you said, Mr. Chairman, the total cost of 
training in the reports, if you add up all of the activities, 
is just over $800 million. Because of combining fiscal year 
1998 and the first quarter of fiscal year 1999, which is 
already completed, and three-quarters of fiscal year 1999, 
which is still prospective, that total number, in spite of 
being in, I think, nine significant figures in the 
calculations, is very much an approximation because the 
programs are still ongoing.
    So if you take those numbers, the great majority of it, as 
you said, Mr. Lewis, well over 90 percent, comes through either 
IMET or the Foreign Military Sales program or States' 
International Narcotics program, all of which is through the 
money appropriated in the 150 account.
    It is also, I think, significant that the great majority--
since we submitted the statement, we actually were able to run 
the numbers more accurately: I said 75 percent in the statement 
to be safe, but it turns out to be 87 percent--is accounted for 
by NATO countries, by our Gulf Cooperation Council partners in 
the Gulf, by our Middle East peace process partners--Egypt, 
Israel and Jordan--and by traditional allies like Japan, the 
Republic of Korea, the Philippines, Singapore, Taiwan, and 
Thailand. And that accounts for 87 percent of the total dollars 
attributed in the report.
    In the statement I go through the rationale for these 
activities and answer some specific questions. I want to make 
one additional point, which actually came to our attention in 
the course of doing the S.O.F. declassification, which is that, 
by administrative error, the Africa Crisis Response Initiative 
activities were inadvertently omitted. We have the data in 
electronic form, and we are formatting it. We will have it for 
the subcommittee by the end of the week.
    Just to summarize, our foreign military training programs 
serve our national policy. They are closely coordinated with 
the State Department and with the relevant U.S. embassies. We 
comply with all requirements and statutes, and we do our best 
to follow less formal guidance on congressional intent, as 
contained in legislative history and other sources.
    If an activity occurs, that is contrary to law or contrary 
to policy, we do our best to identify the problem and fix it as 
rapidly as possible. We are not attempting to evade any laws 
with respect to the training of foreign military forces. On the 
contrary, we deal with these issues in our reports to the 
Congress, with respect to the congressional oversight function, 
both through the two appropriations subcommittees and through 
the authorizing committees.
    We are happy to provide additional information, as 
requested, to increase confidence in the transparency of our 
activities. And consistent with normal security practices, we 
will provide that in unclassified form wherever possible.
    I just want to repeat the point that the underlying 
training in the engagement programs, which are reported in 
these four thick volumes, are very important to our military, 
our foreign policy and our national security interests. The 
dissolution of the Soviet Union and the Soviet Empire in 
Central and Eastern Europe, democratic reforms in Central and 
South America, as well as in Southern Africa, have provided 
opportunities for which we waited for decades. In these and 
other regions, we want the military establishments to be forces 
for stability at home and potential coalition partners with us 
abroad.
    The activities described in the report represent a major 
investment toward those objectives. It is an investment that 
the subcommittee is familiar with because the great bulk of it 
comes through activities within the jurisdiction of this 
subcommittee, and it is an investment, particularly with 
respect to IMET and FMF, for which we recognize and appreciate 
this subcommittee's support. It is an investment we think pays 
off well now and in the future, and I look forward to the 
opportunity to answer specific questions.
    My full statement, I assume, will be included in the 
record.
    [The information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Callahan. Your statement will be submitted and accepted 
for the record.
    Mr. Newsom.
    Mr. Newsom. Thank you, Mr. Chairman, Mrs. Pelosi, Mr. 
Lewis, Mr. Jackson. It is a pleasure to be here before this 
subcommittee. I will make a few brief remarks----
    Mr. Callahan. Mrs. Kilpatrick.
    Ms. Kilpatrick. Kilpatrick.
    Mr. Newsom. Oh, sorry. Mrs. Kilpatrick.

                     Mr. Newsom's Opening Statement

    I would like to submit my full statement for the record.
    I am pleased to join Under Secretary Slocombe today to 
discuss this joint report to Congress on foreign military 
training.
    The Department of State provides the overall policy 
direction for a wide variety of Government activities, such as 
military training, which directly and indirectly support our 
foreign policy goals. We take this responsibility very 
seriously as we work with our colleagues in the Department of 
Defense on the conduct of foreign military training.
    We welcome the opportunity to discuss any questions or 
concerns you may have regarding military training and share 
your interest in maintaining a close relationship between us in 
guiding these programs.
    We view the thousands of training activities listed in this 
report as important tools of U.S. foreign policy. The 
activities funded through the foreign operations appropriation 
are explicitly intended to advance the foreign policy 
objectives of the United States. Fundamentally, this includes 
encouraging democracy, improving human rights and promoting 
regional stability.
    These activities are a useful venue for strengthening 
bilateral ties, promoting greater understanding of American 
values and doctrine and demonstrating the United States is a 
worthy and valuable ally. It is through strong military-to-
military interaction in peacetime that coalition members and 
allies are made in wartime.
    On the other hand, the activities conducted by the 
Department of Defense, with its own appropriations, are largely 
intended to provide U.S. military units with training they need 
to fulfill their wartime and peacetime tasks. But even as they 
meet these needs, these DOD programs also contribute to our 
bilateral and regional policy objectives. Thus, regardless of 
the funding source, both State and Defense are fully cognizant 
of the degree to which these activities make important long-
lasting contributions to U.S. national objectives.
    Let me just briefly outline to you how the State Department 
participates in the policy review process to ensure that there 
is policy oversight over all of the activities, including those 
of the Defense Department.
    Both the Department of Defense and the Department of State 
has a process at a variety of levels to review military 
training conducted for international personnel. This process 
ensures that training activities are in support and consistent 
with overall U.S. policy.
    The theater commanders in chief, or the CINCs, and their 
staff start the approval process by formulating annual plans 
for their areas of responsibility. The CINCs and their staffs 
are in frequent contact with the U.S. embassy to clarify issues 
that impact foreign policy and training activities. The CINCs 
also benefit from having political advisers from the State 
Department, experienced senior foreign service officers, on 
their staffs.
    The CINCs present their annual training and exercise plans 
to the respective U.S. embassies, where it is reviewed by the 
ambassador and the country team. If there are questionable 
cases, our embassies refer the issue to the Department of State 
and DOD for further guidance.
    As training events draw closer and details are finalized, 
the unified command, again, clears the activity with the 
embassy to ensure that there are no new circumstances which 
could make the activity inconsistent with our bilateral and 
regional policy objectives.
    While this procedure has generally been satisfactory, we 
are continuing to try to improve it, especially in countries 
where military training is sensitive. And greater scrutiny has 
resulted in cases where training exercises have been canceled 
or revised.
    However, we are finding it is not always easy to determine 
which units or individuals were involved in abuses, especially 
in countries with weak judiciaries and poor record 
accountability. Our embassies are redoubling their efforts to 
record abuses to ensure that inappropriate personnel are not 
involved in our training programs and that training for 
qualified units is not delayed.
    The great majority of training activities overseas do not 
raise human rights-related concerns and do not require vetting 
beyond that provided by the embassy country team. We are keenly 
aware, however, that troubled human rights records of security 
forces in some countries require especially close scrutiny, 
both locally by the embassy and back at the department level 
here in Washington. For example, allegations of human rights 
abuses in Indonesia resulted in cancellation of the JCET 
program there in May of 1998. Currently, U.S. military training 
with Indonesia military is limited to a small program of 
humanitarian, engineering and medical activities. In addition, 
a mobile team will provide training and human rights awareness 
in civil military relations.
    In the case of Colombia, all individuals or units selected 
to receive training are carefully vetted by the embassy for 
criminal, human rights or narcotics violations. Through a 1997 
End-Use Monitoring agreement with the Government of Colombia, 
we review indigenous sources of information; that is, criminal 
records, and then double-check them against U.S. Government 
records before training is approved.
    In Turkey, the different elements of the U.S. mission in 
Ankara coordinate to ensure that no U.S. Government security 
assistance, which in this case is primarily IMET and counter-
narcotics assistance, goes to security forces involved in human 
rights violations. We have seen something of an improvement in 
human rights performance of the armed forces in recent years, 
and we think that is, at least in some part, due to mandatory 
human rights training for both officers and noncommissioned 
officers of the Turkish armed forces.
    However, human rights problems continue in parts of the 
Turkish police, in particular, which led us last year to 
restrict Ex-Im funding of a U.S. sale of armored vehicles to 
the Turkish police.
    In closing, I want to reiterate that foreign policy and 
military training are mutually reinforcing. Foreign training 
activities are investments that we believe reap significant 
dividends in the long run. We are constantly trying to improve 
our review process at multiple levels, both in the field and in 
Washington, to ensure that we are getting the most from our 
training activities.
    Overall, the benefits derived from training activities have 
generated good will, promoted regional stability and improved 
interoperability with non-U.S. military forces, and we will 
work to continue to ensure that this type of training 
contributes to our diplomatic goals and is consistent with our 
overall foreign policy objectives, including advancement of 
human rights.
    I thank the members of the committee for the opportunity to 
address you on this report and will be glad to try to answer 
any of your questions.
    [The information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                       foreign military training

    Mr. Callahan. Thank you both for testifying. I may be 
unique in Congress, but I agree with you that the monies you 
use for foreign military training is a tool of the State 
Department to promote our activities worldwide, and I think 
that's the way it should be. I know that some, probably Nancy, 
would totally disagree with that, or at least partially 
disagree with that.
    The coalition training, from a military aspect, I think is 
absolutely necessary. If we are going to depend upon these 
countries to be our allies, we must have some type of coalition 
training in order to fight side by side with them should that 
necessity ever occur.
    I agree with it, but there are some who question whether or 
not, as a result of some of this training, there were human 
rights abuses. I imagine in the past there's pretty significant 
evidence that is true. But I can't find it anywhere today. And 
we cannot go back and correct sins of the past. We can only 
insist that this type of abuse or the training that creates 
this type of abuse be on the backs of the United States 
taxpayers.
    So I agree with Nancy's concerns about abuses, and I do not 
disagree that history probably proves her correct. But I do not 
see any evidence, including visits by my staff at my insistence 
to some of these facilities, some of the IMET training 
facilities, some of the School of Americas Activities to make 
absolutely certain that there are no classes taught that teach 
people how to torture people, and we have found no evidence in 
the last couple of years of any real existence or abuse of the 
of human rights that we share Nancy's concern.

                           sandia nuclear lab

    I guess one question, Secretary Slocombe, the Chinese 
situation. Recent reports that members of the Chinese military 
and defense ministry continue to engage in exchange activities 
and contacts with the military. We have seen press reports that 
members of the Chinese military were engaged in some 80 
activities in the United States in 1999, including a visit to 
the Sandia Nuclear Laboratory in New Mexico. In addition, 
members of the Chinese military may be observing airborne and 
infantry training exercises.
    Number one, are these reports true? And in light of the 
serious allegations about spying by China at our nuclear and 
military facilities, do you believe this is in the best 
interest of our national security? And, finally, have members 
of our armed forces, objected to these visits?
    Mr. Slocombe. Mr. Chairman, we believe that the military-
to-military contact program with China serves our interests. 
Needless to say, none of it involves training, in any sense of 
the term, for any of the activities which were of the subject 
of the reports.
    The Chinese army is a major factor in China, and that's 
simply a fact that we have to live with. How that society 
develops in the coming years will be determined, at least in 
part, by the attitudes of the Chinese military. It is an 
extraordinarily insular institution. We are struck by the 
number of senior visiting Chinese officers who, except maybe 
for a trip to Moscow or to Pyongyang or Hanoi in the old days, 
have never been outside China. And we believe, very strongly, 
that contact with the outside world and particularly with the 
United States military, is in our interest.
    First of all, I think they understand how good we are when 
they see us. Sometimes they actually tell us that in so many 
words; that they realize not just the sort of nice things about 
the American military, but also its extraordinary effectiveness 
and, in a sense, how far behind they are relative to us. That 
is not a bad message to get across.
    They also realize something about how the military operates 
in a democratic, constitutionally-run society, where the rule 
of law applies. I want to come to a couple of specifics. But 
all of that said, we apply very careful security standards to 
any visits. And we also apply something that goes beyond the 
security standards--we also apply a reciprocity standard. We 
want to make sure that when our military people go to China, I 
do not think the Chinese show us anything that they do not 
intend us to see and, quite frankly, we do not show the Chinese 
anything that we do not intend them to see, but we also want to 
make sure there is a reasonable balance. And we have had some 
important progress.
    For example, when Secretary Cohen was there about a year 
ago, we went to the Air Defense Command Center for the Bejing 
military region, which is the first time a foreigner, at least 
an American, has ever been allowed to visit, and it included an 
entourage of American military officials.
    Let me just briefly respond on the two points. One, the so-
called visit to the Sandia Nuclear laboratory. Foreigners are 
regularly invited to visit Sandia a part of their tours. It 
happens to be at Sandia, but it is a chemical weapons 
verification center, where we are trying to work with countries 
that are participants in the Chemical Weapons Convention on 
means of verifying the treaty. It has nothing to do with 
nuclear activity directly.
    On the airborne and infantry training exercises, it is 
certainly the case that periodically Chinese visitors, like 
visitors from lots of other countries, are taken to see our 
training activities. We are very careful to make sure that, in 
terms of anything we show as part of those activities, it meets 
security standards. We are aware of the possibility of 
activities that are not within the purposes of the visit, and 
if we believe a danger of unauthorized activities exists we 
modify the visit or do not do it.
    My basic message is this is a program which it is very much 
in our interest to continue, but we do it very conscious of 
some of the potential security problems that are involved.
    Mr. Callahan. Mrs. Pelosi.
    Ms. Pelosi. Thank you, Mr. Chairman. As the Secretary said, 
this is not the subject of today's meeting, but I did want to 
make the point that Congressman Visclosky, the Ranking Member 
on Energy and Water, and I sent a letter to Mr. Richardson in 
November asking, when he was newly appointed Secretary, to send 
us a list of all Chinese who have visited the national lab 
since January of 1993. We have not heard back, and we keep 
calling to see when we are going to get a response to that 
letter, because it is an issue of major concern to us about 
this accessibility.
    I had particular concerns because I know that the 
administration had looked the other way on visits of diplomats 
to Silicon Valley beyond the range that they are allowed to go 
in the San Francisco Bay area, and Mr. Visclosky had some 
concerns about the openness of our labs.
    But to get to the point of today's hearing. I am so glad 
you asked that question on your time. Mr. Chairman, you and I 
are not that far apart. I was listening to what you said. As I 
said in my statement, there is no doubt that the Defense 
Department has the authority to conduct foreign military 
training with their own funds. I am concerned that I think the 
real issue for us today, as I said, is, is Congress adequately 
informed of DOD's decisions to deploy U.S. forces in training 
situations with clear policy impacts. You said you think they 
should be doing this, and we agree that they have the authority 
to do it, and there are opportunities in our national interests 
to do so.
    Mr. Callahan. But, in addition, we can only fund what is 
authorized.

                              human rights

    Ms. Pelosi. I understand that. But in addition to that, you 
said we do not use taxpayers' money associated with these 
violations of human rights, and that really is the point; 
Guatemala, Indonesia, Colombia, other places, where we have 
serious questions about how the decisions were made on the 
rest, but we have to protect how the taxpayers' dollar is used.
    The taxpayers do not think that our money is being used to 
train the Kopassus to teach sniper shooting, and kidnapping and 
all of the rest of it in Indonesia. Kopassus was a major 
embarrassment for the United States. It is likely that they 
were responsible for the recent round of kidnappings last year, 
and the exercises were suspended because of these revelations, 
I believe. I do not remember Congress being informed that they 
were suspended but, nonetheless, they were suspended, but 
springing from the behavior of people that we were training.

                                  imet

    So this is not about saying, no, there is no case for 
military training. I, myself, have cooperated with the 
Administration on introducing IMET for one year in Pakistan 
because we want to give it a chance to see if we can develop 
these relationships with the Pakistani army, which has an 
important role in Pakistani society.
    But we hear over and over again that we have to establish 
these relationships, and they pay off for the U.S. You know, we 
certainly have a long list of names starting with D'Aubuisson 
from El Salvador, who went to the School of the Americas. Can 
you tell us the names of any of the people whom we have 
benefitted by this training who then emerged as leaders in 
their country and accrue to our benefit for having trained 
them?
    I mean, we know the bad list. Do you know the names of any 
on the good list?
    Mr. Slocombe. I am not sure I can remember the names. But I 
know it is my experience that as you travel around, 
particularly, in--I have just been handed the list. [Laughter.]
    Mr. Slocombe. Not names, but titles.
    Ms. Pelosi. Names? Do you have names?
    Mr. Slocombe. Well, the first is the king of Jordan.
    Ms. Pelosi. Well, I hope you are taking my question 
seriously.
    Mr. Slocombe. I am taking it seriously. What I am struck by 
is the value we get out of having foreign military officers who 
have spent a significant period of time, preferably in the 
United States, in an IMET funded course or something like that 
or in an FMF-funded course or a course funded by domestic or 
national funds.
    They know the United States, they know something about how 
the United States operates as a society and how the United 
States military operates. Just to give you an example of some 
of the most senior, the king and prime minister of Jordan are 
both IMET graduates, the chief of the Czech air force, the 
minister of defense of Venezuela, the chief of the armed forces 
of Latvia, the Secretary of State--that's roughly my 
equivalent--for Defense for Romania, the deputy commander of 
the Botswana defense force, the minister of national defense in 
Ecuador, the director of the Strategic Defense Institute in the 
Slovak Republic, the commander in chief of the Honduran armed 
forces, the commander of the Djiboutian armed forces, commander 
in chief of the Bahrainian defense force, the deputy secretary 
of Defense of Kenya. And this is a list of very senior people.
    I believe there are undoubtedly exceptions.
    Ms. Pelosi. Well, and that is what we are trying to get at 
today. I mean, with all due respect to that list, it is not 
exactly what I would call a strategic one. But nonetheless, it 
is a list----
    Mr. Slocombe. Why is it not strategic?

                                colombia

    Ms. Pelosi. You did not address any of the countries where 
we have the concerns; Guatemala, Indonesia, Colombia, countries 
like that. If I may go into a country, the subcommittee spent 
considerable time discussing the deployment of U.S. special 
forces to Colombia to train a counternarcotics battalion of the 
Colombian army at our recent security assistance hearing. We 
spent time on this.
    This is an instance where decisions have been made by the 
Administration which have overwhelming foreign policy 
implications in which Congress has no role. In addition to this 
program, the report before us shows a significant amount spent 
for both IMET and other security assistance training which we 
expect in conjunction with our counternarcotics program.
    However, the report also indicates that in 1998 nine 
different JCET deployments occurred training 450 Colombian 
personnel at a cost of $1.2 million. In 1999, 25 different JCET 
deployments are planned costing over $3 million, benefitting 
well over 1,000 different personnel for all branches of the 
Colombia military, as well as the police.
    What benefits do U.S. troops gain from this level of 
engagement in one country? Further to that, because I know your 
time is short, in our prior hearing, the DOD witness indicated 
the decision to train this battalion had not been finalized, 
and this somehow justified the lack of Congressional 
consultation.
    Since the first deployment of our trainers is expected as 
soon as April, can you indicate the status of our policy and 
indicate when, if at all, Congress will be consulted?
    Can you explain how the deployment of 20 U.S. special 
forces for 90 days to one location in Colombia to provide basic 
training to Colombian army recruits will benefit the readiness 
of the U.S. armed forces? There are no resources budgeted to 
equip this counternarcotics battalion, to my knowledge, from 
our budget. Clearly, the Colombians expect this unit to have 
modern equipment and to have air mobile capability. Where are 
the resources going to come from?
    Explain the different standards used to vet Colombian 
personnel receiving training from U.S. sources. My concern 
about Colombia, as you know, there has much been written about 
it, and we all know we do not believe everything we read in the 
paper, but as you know, beginning in 1994, Congress required 
the Clinton administration to verify that U.S. military 
assistance would go only to troops that primarily carried out 
anti-drug operations.
    In March 1996, the Administration reacted to evidence that 
President Samper had taken money from the Cali traffickers by 
cutting off almost all American aid to Colombia except what was 
designated to fight drugs, a step known as decertification.
    Yet, according to many officials, the Pentagon quietly 
distinguished itself by finding creative ways around the 
restrictions. ``We refuse to disengage,'' said a Pentagon 
official. So this is why I hope you understand why these 
concerns arise; Kopassus in Indonesia, the record that the 
President apologized for in Guatemala and this situation in 
Colombia, to name three.
    Mr. Slocombe. That is a lot of questions. Let me----
    Ms. Pelosi. I know, but I had to get them all in because 
you have to go. [Laughter.]
    Mr. Slocombe. Let me try to start. First of all, if there 
was ever a case where there has been discussion with the 
Congress about a specific program, it is true of the Colombia 
drug battalion. That program was the primary topic, or among 
the topics of discussions at at least five briefings for staffs 
of a whole range of committees, including the staff of this 
committee, where the Department of State is in the lead.
    The training of the Colombian counterdrug battalion is a 
matter distinct from the JCET issue. The reason that we do 
JCETs in the Department of Defense is that one of the critical 
capabilities of the Special Operations Forces is to be able to 
go and work with the militaries of a whole range of countries 
around the world. And the primary purpose, and the standard by 
which we decide when to do JCETs, is what are the requirements 
that the SOCOM establishes and the regional special operations 
commands establishes for training our people with these 
responsibilities.
    They get opportunity to practice their language skills. 
They get an opportunity to do what they would be doing in a 
combat or, for that matter, a peacekeeping or peace support 
situation.
    The benefits to the American personnel I think are 
straightforward and those are they. In Colombia, the fact is 
that we have a very major drug problem, and we are trying to 
work with the Colombian military and law enforcement people to 
deal with that problem. We are trying to do it in a way which 
keeps us clearly distinct from the counterinsurgency effort, a 
distinction which is occasionally difficult to draw because the 
counterinsurgency effort is heavily involved with the drug 
lords. I do not mean to equate them, but there are some funny 
alliances in that part of the world.
    Congress, just last year, enacted special legislation 
authorizing special programs with Colombia and also with Peru. 
We have authority under the general authority we have for 
counterdrug programs for these activities. I think that the 
work we do in Colombia is an example of the situation where 
there are real problems, and no one disputes that--even the 
Colombians, for that matter, do not dispute--where that country 
needs to improve its adherence to standards of conduct in their 
counterinsurgency operations. But it is also a country where we 
have a strong interest in a vigorous counterdrug program.
    Needless to say, I do not agree with the characterizations 
of our intent or our practice in the newspaper article you 
read. What we have done has been entirely above board and 
consistent with the authority that we have and, more to the 
point, consistent not only with the requirement to maintain the 
readiness of the special operations troops that are involved, 
but also consistent with the very high priority that this 
country, and this administration, and this Congress put on the 
counterdrug effort.

                           abuses of kopassus

    Ms. Pelosi. If I may, Mr. Chairman, just one follow-up. Do 
you think, Secretary Slocombe, that the U.S. training of the 
Kopassus was consistent, to use your word, with the intent of 
Congress and our foreign policy goals in Indonesia? Is that 
something you would be proud of and point to as a positive 
example of our foreign military training?
    Mr. Slocombe. I make no apologies for the abuses of 
Kopassus or any of the other cases you cite. I think there is a 
certain amount of hindsight in this, and I am satisfied that 
while there were good reasons to stop the program, and we will 
not do it in the future, judged by the information that the 
people had at the time they were making the decision, there 
were good reasons to work with Kopassus. Among other things, it 
was the entry point for being able to work with the Indonesian 
military in other areas which are not controversial, and there 
are no serious allegations of abuses.
    But the Kopassus record is appalling, and there is no 
excuse for it.
    Mr. Callahan. Chairman Lewis.

                       foreign military training

    Mr. Lewis. Thank you, Mr. Chairman. Mr. Secretary, we 
appreciate very much your being with us. I must say that I have 
paid more attention to this issue since I have had the 
privilege of being Chairman of the Defense Subcommittee. Also 
this issue was highlighted largely because of a vote we had on 
the floor two years ago in which there was a very close call 
between funding the School for the Americas. And I had a 
personal conversation with Sanford Bishop, a member of 
Congress, who represents the territory that involves the School 
for Americas. Mr. Bishop is an articulate and passionate 
supporter of the work that is being done at our school.
    I want to mention that, through the work of my subcommittee 
so far this year, we have asked a variety and mix of people, 
including Secretary Cohen, Secretary of the Air Force, the Navy 
and the Army, the commandant of the Marine Corps, General 
Krulak, all of those CINCs, as well as their aides, their views 
of the importance of foreign military training, both the kind 
that is in my bill and that which is a part of IMET. Without 
any exception, they gave a very strong endorsement of the 
value, both in terms of the relationships between our military 
and foreign military leaders, but also in terms of the value to 
our country that this training, on an ongoing basis, has had.
    Just today, just a few moments ago, Assistant Secretary 
Buchanan said, ``As we contemplate Kosovo, it is really very 
important to recognize that any involvement we might find 
ourselves in will be with NATO forces, foreign military leaders 
who have relations with our leaders that are very important,'' 
and it was suggested it would be much more difficult and much 
less valuable if we had to develop those relationships as we go 
to war rather than long before. That is a very poignant, timely 
point made just today in our committee.
    The CINC in charge of the territories to our south, General 
Wilhelm, said, ``For the life of me, I cannot imagine why 
people would even question the value to us, militarily and 
otherwise, of the School for Americas.'' He said, ``There are 
at least ten ambassadors in Latin countries * * *'' I may be 
mistaken here, but I am remembering what he said. ``* * * who 
have gone through that training. There are hundreds of military 
chiefs who have gone through that training,'' and he went on. 
And very poignantly he said, ``The unabomber went to Harvard, 
and there are many a graduate who might be described as being 
on a different path.'' Hitler went to the School of the Arts in 
Vienna. Probably there are other graduates of that School of 
Arts who had a different pathway.
    I can understand these questions that take us back to the 
eighties and Doba San and Noriega. But, my goodness, the only 
remaining country in all of Latin America that is not a 
democracy, or at least trying to strengthen democratic 
processes is Cuba. I do not know whether Castro went to School 
of Americas or not? Maybe I should leave you with that 
question.
    Mr. Slocombe. I believe that he did not go to the School of 
Americas.
    Ms. Pelosi. Mr. Chairman, may I just speak to that point?
    Mr. Callahan. Certainly.
    Ms. Pelosi. I just want the record to show that we are not 
talking about the importance of interoperability among the 19 
NATO countries that are involved in air strikes over Kosovo. We 
are talking about something quite different from that.
    Mr. Lewis. But these are military leaders who will have to 
work together, and in many cases----
    Ms. Pelosi. No, absolutely. And that is a given. What we 
are talking about are the abuses, and Kopassus is one recent 
example, not going far back in history. I think we have more in 
common on this than your comments indicated. But, again, we all 
understand how important interoperability, being able to work 
togther is. What we are concerned about is that our funds are 
being used in a way that attacks dissidents; troops that fired 
on people in East Timor who are connected to the U.S. training 
is not what the American people want, and we have a 
responsibility to ask these questions in our oversight.
    Mr. Lewis. Frankly, I do think that is part of our 
responsibility in oversight and otherwise. But let me ask 
either of you to respond to this question that really is an 
extension of what Ms. Pelosi just said. We have seen a very 
significant transition in Latin America, in terms of the growth 
of the potential for freedom and democracy. I would have to 
assume that the new military leadership in many of those 
countries are people who participated in these kinds of joint 
military training exercises, including the School of Americas, 
but also IMET and, indeed, the program that is financed within 
my own committee as well, which is a joint program.
    Mr. Slocombe. I think that is true, and I think also, Mr. 
Chairman, that the point you make about especially in Latin 
America, but it is also true in Eastern Europe, it is true in 
many countries in Africa, it is, to some degree in certain 
countries, true in Asia. That what we have seen with the end of 
the Cold War and with other changes in the world, is countries 
that are trying to establish a democratic system, a system of 
the rule of law, open markets and so on, they are going to have 
militaries. Countries have military establishments, with a few 
exceptions.
    And it is very much in our interest that those militaries, 
similar to the rule for doctors, that they, first of all, do 
not do any harm. That is, that they do recognize the role of 
the military in a democratic society and accept that and, 
second, that they be good at something. That they be able to 
work in their system to fulfill a function which serves their 
interests, and often that will serve our interests because of 
interoperability and so on.
    And I like to make the point that it is not just when we 
train them explicitly in human rights or civil-military 
relations or the rule of law and that sort of thing. It is also 
when we train them in how to run a professional military and 
not a political party or a family business or an instrument for 
corruption or oppression. We are also serving that purpose, and 
that is one of the key things that I think we get out of this 
military training program.
    Unfortunately, if I am going to have any time to get to my 
meeting, I am going to have to excuse myself.
    Mr. Callahan. We applaud Ms. Pelosi and her concern about 
human rights, and we do not want to be accused, nor do we want 
to participate in any way whatsoever in training people who go 
back to their respective countries and violate human rights.
    Nancy, my daughter graduated from Auburn last Friday.
    Ms. Pelosi. Congratulations, Mr. Chairman.
    Mr. Callahan. Cum laude for the last quarter. [Laughter.]
    If you look at the graduation program and you see the 900 
students who graduated this winter semester at Auburn, you will 
never hear about those who make huge contributions to society 
that go out as most of the graduates of these schools do and 
that this training benefit do.
    What about the training, for example, at the School of 
Americas where we train them to treat humans correctly and they 
go back and make a contribution and they do treat people in a 
humane manner? You never hear about them.
    The only thing you hear about are those who go wrong, and 
certainly, with the 900 students at Auburn, you are not going 
to hear from 890 of them as far as any degree of notoriety is 
concerned, but some of them are going to go wrong and you are 
going to read about them.
    I think it is important that we recognize that the School 
of Americas has made dramatic changes. Jesuits taught me, and 
they come to my office every year and are going to condemn me 
to hell if I support the School of Americas, I tell them if you 
all can give me one class or one textbook that proves what they 
are arguing--that we are teaching these people to go back and 
torture people, which we are not--if they can show me one 
textbook, if they can show me one class where this is being 
taught, then we will abolish the School of Americas, but they 
cannot do that because it is not being done.
    We have sent our staff people down there. They have 
investigated. They have reviewed every textbook there. There is 
no such thing. There may have been at one time, but not now.
    Ms. Pelosi. Because of congressional oversight.
    Mr. Callahan. That is a compliment to you and those who 
have brought these problems to our attention, but the fact 
remains, that we have corrected it. We cannot deny the 
educational opportunities of military preparedness to these 
countries who are struggling to create democracies, especially 
in this hemisphere. The other 87 percent, the NATO portion that 
you mentioned, none of this is ever questioned. It is just one-
tenth of 1 percent of the monies that are being spent in these 
endeavors.
    If, indeed, they can show us where we are contributing in 
any way, shape, or form towards any type of encouragement of 
human abuses, then I will join with you and we will eliminate--
--
    Mr. Lewis. Mr. Chairman, whatever time I might have 
remaining, I might mention that I----
    [Laughter.]
    I was going to mention that Secretary Cohen, as I remember, 
had been one of the other CINCs or Secretaries, but they did 
name specific people who are in ambassadorial kinds of 
relationships, and dozens of military leaders, et cetera.
    I might mention to you, Mr. Secretary, as you leave, that I 
just received a note that said that Minister Primakov has 
turned his plane around.
    Ms. Pelosi. Oh, turned around?
    Mr. Lewis. Turned around. He is not coming here, and we 
have withdrawn our ambassadors, as I understand it.
    Mr. Slocombe. Yes. When Holbrook left, the U.S. Embassy and 
most of the NATO embassies, which were down to skeletal staffs 
in any event, closed down.
    Could I just, before I leave, make one point? Pursuant to 
the statutes which were enacted last year, we have set up 
elaborate procedures within the Department of Defense to 
ensure, as Mr. Newsom mentioned in his testimony, that we are 
in touch with the embassies in the countries where an activity 
is going to take place.
    Before anybody can sign off on any DOD-funded foreign 
military training activity, there has to be a certification by 
a non-DOD member of the relevant embassy that there is no 
adverse human rights information about the unit or individual 
to be trained.
    If there is, there is an elaborate procedure to do 
something about it, but the point is that we now have a system, 
again, pursuant to----
    Ms. Pelosi. Congressional.
    Mr. Slocombe [continuing]. Congressional interest, but not 
with respect to any policy that we did not think was the right 
policy.
    We would always respond if we had information about adverse 
human rights reports about people who have been trained. We 
will make sure that if that information exists, it is brought 
to the attention of the decision-makers, and normally, what 
happens is you just change the program.
    Mr. Callahan. Let me, before you leave, Mr. Secretary, let 
us see if anybody has any questions they need to direct to you.
    Yes. Ms. Kilpatrick.

                               Oversight

    Ms. Kilpatrick. Just I am happy to hear you say, Mr. 
Secretary, that you have instituted some oversight provisions 
in the DOD budget that would address some of our concerns on 
this issue. I think that is very good, and I appreciate that 
very much. As you leave, I wanted to make sure that I heard 
that correctly. I think that is what I heard.
    Mr. Slocombe. That is right. As I say, we have a process. 
Things are approved at different levels of the system, but 
whoever has to sign off on it--sometimes it is the Secretary, 
sometimes it is the CINC, sometimes it is other people--there 
has to be a certification in writing by a non-military, non-DOD 
official of the relevant U.S. embassy that there is no adverse 
human rights individual with respect to the individual.
    Ms. Kilpatrick. That is a step in the right direction. I 
appreciate it.
    Ours is statutory. Yours is administrative, it sounds like, 
and we appreciate that.
    Mr. Slocombe. This is pursuant to the statute.
    Ms. Kilpatrick. Yes. Thank you.
    Thank you, Mr. Chairman.
    Mr. Jackson. Mr. Chairman, just very quickly, I would like 
to submit all of my questions for the record, but I do want to 
say just before the Secretary leaves that our current and 
ranking member, Ms. Pelosi, worked very hard to include Section 
581 language in the committee report.

                       Military Training Activity

    Mr. Jackson. I looked at the language very, very carefully, 
and the language says this report shall include for each such 
military training activity the foreign policy justification and 
purpose for such training activity, and the general summary or 
the executive summary that is provided for each such military 
activity or training activity is very thin, if nonexistent.
    It attempts in the executive summary to cover a general 
analysis of how these various programs benefit and support 
foreign policy, but the committee language is specific. It says 
for each such training activity, and there is no report, at 
least to the best of my knowledge, that supports each training 
activity, and I think the language is very, very specific.
    I also want to indicate the other conversation that was 
extremely helpful, and, Mr. Chairman, I say this very 
respectfully. There may be no such international book on human 
rights violations that we train militaries around the world 
with.
    I think the problem may actually occur in emphasis of 
training. What do I mean by emphasis of training? Our Congress 
and our Nation is somewhat poised to deal with the Kosovo 
situation.
    Our troops, our men and women, may end up in some other 
part of the world as peace-keepers. That is the emphasis. The 
emphasis of our military is not patrolling the streets of 
Chicago. They are possibly going to Kosovo and other hot spots 
around the world.
    At the School of the Americas where we train men and women 
to go back to their countries, the emphasis oftentimes of the 
militaries are not to supply troops to NATO or to supply troops 
in other hot spots around the world. They end up being police 
forces within their own countries, and that is where many of 
the abuses I believe Ms. Pelosi was talking about are 
highlighted and worthy of further discussion.
    I am going to submit, Mr. Chairman, all of my questions for 
the record, and I would certainly appreciate a response from 
both the State Department and Department of Defense.
    Mr. Callahan. We will excuse you, Mr. Secretary.
    Ms. Pelosi. Thank you, Mr. Secretary, for being here on 
this very difficult day.
    Mr. Slocombe. Thank you.
    Ms. Pelosi. And I look forward to continuing our 
conversations on this. Again, with the recognition that our 
military training is valid, we are just worried about the 
abuses.
    If Auburn were a medical school and you have got the wrong 
doctor, you would not be too happy at that.
    Mr. Callahan. She got the wrong doctor.
    Mr. Slocombe. Equally, we are committed to make sure we do 
not train people who have abused human rights in the past, and 
we certainly do not train them in anything that by any stretch 
of the imagination would teach them to do wrong.
    Ms. Pelosi. Thank you, Mr. Chairman.
    Mr. Slocombe. Thank you.
    Mr. Callahan. All right.
    Ms. Pelosi. May we ask our distinguished chairman, when did 
the plane turn around?
    Mr. Lewis. I just got the note just before I came in here. 
So it has been within the last hour.
    Mr. Newsom. I was told just before I left the Department.
    Ms. Pelosi. When we were at the briefing at the White 
House, they said that there was the chance that that would 
happen. That is very bad news.
    Mr. Newsom. Mr. Chairman, would you like for me to respond 
to Mr. Jackson?
    Mr. Callahan. Oh, yes, very certainly so.
    Mr. Newsom. On the question of laying out the foreign 
policy rationale or justification for the training activities, 
I was told by others who appeared before other committees that 
this question had been raised, and so I looked into with the 
people who offered the report as to exactly why that is 
structured the way it is.
    Perhaps there was something of a misunderstanding. Our 
reading of the language made us believe that you were looking 
for the overall justification and objectives established for 
the individual programs. There are over 51,000 individual 
activities. It did not seem reasonable that you would expect 
there to be a justification for each one of the 51,000 
activities.
    So that is the----
    Ms. Pelosi. Too bad we did not have some kind of 
conversation.
    Mr. Newsom. Yes. I asked were there any exchanges, to be 
sure everyone understood, and I was told there was not. So I 
regret that.
    I was told at least you, Ms. Pelosi, were interested in the 
justifications for the training activities, at least in some 
selected problem countries. If my understanding is correct and 
it would help the situation, I would undertake, if your staff 
would identify countries of concern, that we would seek to do 
that for you.
    Ms. Pelosi. But my concern is overall, but it is Mr. 
Jackson's time.
    Mr. Jackson. It is still my time.
    Then help answer this question for me. Is it true that the 
Pentagon sidestepped the subcommittee's ban on funding to 
Indonesia with the JCET programs?
    Mr. Newsom. That the Pentagon side-stepped the ban, yes.
    Mr. Jackson. On IMF funding to Indonesia with the JCET 
programs.
    Mr. Newsom. Well, I suppose that depends on where you sit.
    There was no legal prohibition on JCET activities in 
Indonesia. JCET activities are considered to be principally a 
training activity that benefits the United States forces.
    There was a ban on IMET activities up to 1996, I believe, 
in Indonesia, so no IMET activities took place.
    These are no co-equal types of activities. IMET activities 
are aimed at establishing contacts with militaries who try to 
cultivate American military values in these militaries. The 
training is generally almost always done in the United States. 
Only exceptionally is it done abroad, but the JCETs have a 
completely different purpose. So, from where I sit, the answer 
to your question or your statement there, Mr. Jackson, would be 
no.
    Mr. Lewis. Mr. Jackson, would you yield?
    Mr. Jackson. I would be happy to yield.
    Mr. Lewis. I am going to try to clarify this in my own 
head. I think at one place or another, there was a restriction 
on the IMET funding which is funded through this subcommittee. 
That same language, however, did not apply within the Defense 
Subcommittee or the Authorization Committee, and so it did not 
affect the JCET program, which come under our jurisdiction. I 
frankly did not realize this myself until a couple of weeks 
ago.
    So apparently, JCET went forward, but the IMET programs 
were not funded. Is that right?
    Mr. Jackson. Thank you, gentlemen.
    Ms. Pelosi, did you want some additional time?

                                  imet

    Ms. Pelosi. I just would say that I think it was clear what 
the intent of Congress was on that subject, and I think you 
were duly embarrassed by the training of the Kopassus that took 
place in light of the Kopassus record, and that is all we are 
trying to say here. You know what the intent of Congress was. 
You had to know what the potential abuses were there--not the 
potential, but actual. So you go take an end run with JCET and 
then say you do not think that is circumventing the intent of 
Congress in terms of training the military there.
    Just further on Mr. Jackson's point, when you lump the IMET 
training into large categories and it contains lots of acronyms 
and the rest for which you have no key, you are giving us data 
that is not really informative. So we may have to have some 
more conversations about what is in this report.
    Sometimes it is a technique, a tactic, to just dump 
information which is not easily as discernible as it should be, 
without the justification that specifically is requested. Let 
us put the best intentions on what you were doing and say that 
perhaps as this unfolds, we can get the real information there.
    Mr. Lewis. Maybe in past administrations. Certainly not in 
this one.
    Ms. Pelosi. Mr. Chairman----
    Mr. Lewis. I am kidding.
    Ms. Pelosi [continuing]. You know that this subject was not 
something that only I had a personal interest in, and we talked 
about it in the committee only. This is an issue that is 
debated on the floor of the House every time our bill comes to 
the floor. Is that not right, Mr. Chairman? Indonesia, and IMET 
to Indonesia, has been a very high-profile issue in this 
Congress, and I think the military knew full well what the 
intent of Congress was in the strong vote that went in 
prohibiting IMET to Indonesia, but that is what hopefully we 
will be able to accomplish with this.
    Mr. Callahan. And then that is also why we developed an 
enhanced----
    Ms. Pelosi. That is right, expanded on that, exactly.
    Mr. Jackson. Mr. Chairman, I would be happy to yield back 
my time. I know my time has long since expired.
    Mr. Callahan. We are going to let Ms. Kilpatrick get her 2 
cents in here first.
    Ms. Kilpatrick. Thank you, Mr. Chairman.
    I am enjoying the conversation. I would yield to my 
distinguished colleague. [Laughter.]
    Mr. Jackson. I thank the gentlelady for yielding.
    I just wanted to make a brief observation of an article 
that appeared in The Washington Post entitled ``Free of 
Oversight: U.S. Military Trains Foreign Troops,'' and there was 
a quote from Wayne Downey, Commander of U.S. Special Forces 
Operations Command from 1993 to 1996, where he said, ``There is 
definitely a political card at play with the JCETs. They are a 
direct instrument of U.S. foreign policy. They must be the most 
direct and most involved tangible physical part of U.S. foreign 
policy in certain countries.''
    So I would certainly want to associate myself with 
everything that Ms. Pelosi said with respect to our sensitivity 
and Congress' intent with respect to not being considered a 
side-swipe.
    I thank you, Mr. Chairman.
    I would be happy to yield the gentlelady back her time.
    Ms. Kilpatrick. Thank you.
    I yield my time to the Chair.
    Mr. Callahan. Ms. Pelosi.
    Ms. Pelosi. Yes, Mr. Chairman.
    It looks like we have a series of votes coming up. So maybe 
this being the day that it is, we should try to squeeze in as 
much before the vote as possible.
    I want to ask some questions about Guatemala.
    Welcome, sir.

                             guatemala imet

    An analysis of the five-volume report indicates that 
Guatemalan fiscal year 1999 can expect funding for 25 IMET 
students in 14 different courses, the deployment of two mobile 
training teams to Guatemala, a separately funded course for 
students at the National Center for Hemispheric Defense 
studies, two students attending the U.S. Military Academy at 
West Point, and the deployment of U.S. forces in conjunction 
with JCET exercises in the country.
    This is all taking place in the context of this 
subcommittee limiting Guatemala to expanded IMET only. With 
respect to IMET 1999 plans, they are sending seven students to 
the School of the Americas for three different courses, 
including two students for command and general staff course. 
Can you explain how these School of the Americas courses fit 
the definition of expanded IMET?
    I will have some follow-up questions to that as well.
    Mr. Keltz. I think, first of all, the issue is how do you 
address professional military education, and does it fall 
within the definition of ``expanded IMET'' in terms of the 
exposure to U.S. democratic principles and processes?
    Part of the training at those schools includes orientation 
and travel, specifically under an information program to expose 
them to democratic principles. So I am not clear where the 
concern arises with those particular curricula.
    Ms. Pelosi. I think you do know because you answered the 
question in a manner in which you did.
    What you are saying is that you are giving this expanded 
view of expanded IMET of something beyond the specifics which 
are allowed under expanded IMET to say, in general, if you are 
talking about a professional military, then that should be 
included under the expanded IMET?
    Are you saying that what the School of the Americas teaches 
is expanded IMET, that their curriculum is expanded IMET?
    Mr. Keltz. Not the entire curriculum, no.
    You said School of the Americas. I do not have that same 
listing.
    What I do have is the American language course, civil 
military operations, command and general staff, as the IMET, a 
professional development course, democratic sustainment, 
officer basic courses and so on. I will be happy to try and 
further review that for you.
    Ms. Pelosi. I would appreciate that.
    How does the U.S. Army mobile training team deployment to 
Guatemala plan for fiscal year 1999 with IMET funds fit the 
definition of ``expanded IMET''?
    Mr. Keltz. Well, again, you have me at a disadvantage, Ms. 
Pelosi. I do not have the specifics of that MTT, but I will be 
happy to get that for you.
    Ms. Pelosi. We got this from you.
    The fiscal year 1999 JCET deployments for the counter-
narcotics purposes are for counter-narcotic purposes according 
to this report. This is for Guatemala still.
    Can you explain what units of the Guatemalan army are 
involved and the training they are receiving for those counter-
narcotic goals?
    Mr. Keltz. I have no information on that JCET.
    Ms. Pelosi. Okay. Well, we will need to get those for the 
record as to Guatemala.
    Mr. Keltz. I will be happy to provide those for you.
    Mr. Callahan. We would like the responses to these 
questions, too, before we write our appropriation bill.
    Mr. Keltz. We will get those to you in several days, Mr. 
Chairman. We would be happy to.
    Ms. Pelosi. May I continue, Mr. Chairman?
    Mr. Callahan. Yes.
    Ms. Pelosi. This is just a point of information. The report 
indicates that over 150 individuals from many different 
countries attend West Point, the Naval Academy, the Air Force 
Academy, under service-sponsored academy exchanges. Does DOD 
pay for that many scholarships to our service academies?
    I am sure you will be happy to give a justification.
    Mr. Keltz. We waive tuition to those countries that provide 
reciprocal training for our military personnel. So, in the 
main, yes, we do.
    Ms. Pelosi. You waive the----
    Mr. Keltz. That is correct, but only when there is 
reciprocity.
    Ms. Pelosi. Only when there is reciprocity. So, in your 
view, there is no opportunity cost for other people in our 
country who would want to attend those institutions.
    Mr. Keltz. That is the intent, yes.
    Ms. Pelosi. Okay. Let me just see. I did not realize I was 
going to have this much time for questions, Mr. Chairman, but I 
am always happy to do that.
    Mr. Callahan. She complains if I cut her off, and she 
complains when I give her too much time.
    Ms. Pelosi. Did you take my questions? [Laughter.]
    I think that there are many of our colleagues who have 
questions about IMET. That is why expanded IMET was developed, 
and we do not want to see that used as an umbrella under which 
to put regular IMET.
    Again, I will come back to the point that we do not have to 
have a problem here. I think you invite the problem when you 
keep the information from Congress, and then you get publicly 
embarrassed by something like the Kopassus situation.
    Congress has tried to make information available. Members 
have tried to make information available to the administration 
that bad things are being done with our money, our training, 
our anointing these people in these countries as somebody who 
has some association with the United States and that they are 
proceeding in a manner that we would not be proud of.
    So I hope that we can work together. I am hoping very much 
that we can work together because otherwise we are going to 
have this argument all the time, and I do not really think that 
it is necessary.

                              jcet report

    The JCET report indicates that the armed forces of a 
country in North Africa will travel to Turkey to receive JCET 
training from U.S. forces. Can you explain why this is 
happening? Who pays for the transportation cost for the foreign 
troops? Is this a common practice? Are Turkish troops 
participating in this training? Are you aware of that? It is in 
your report.
    Mr. Keltz. There are a total of some 51,000 individual 
events. I have not focused on that one particularly. I will be 
happy to take the question for the record.
    Ms. Pelosi. Well, it seems like every question I ask is one 
that seems to be very unusual, but to me they just leap out 
because they were the most notorious in talking about 
Indonesia, Guatemala, Colombia, and some of these others, 
especially as relates to a country like Turkey.
    Let me just ask you about readiness. The state of readiness 
of our armed forces is not what we would all like it to be, 
according to many in Congress and the Pentagon.
    Intelligence and defense-related committees have heard that 
we are stretched thin from Pentagon witnesses. We have arrived 
at this stage because of inadequate budgets and the deployment 
of too many U.S. troops to too many foreign countries for too 
long, according to some congressional experts.
    It is stated that training does not affect OP TEMPO or 
morale. Can you quantify for me the number of troops deployed, 
the time frame for these deployments, and how the foreign 
training affects our own training regime? How many U.S. troops 
in total have been deployed for training of foreign troops in 
the past 2 years, and from how many different units, for the 
record?
    Mr. Keltz. Would you like me to----
    Ms. Pelosi. Well, I think, Mr. Chairman, what we are going 
to do is establish a dialogue on the subject so that when we 
ask for a report, it comes back in a way that is serviceable.
    Our chairman of the Defense Committee argues strongly. I do 
not think you already get a status quo in terms of the 
violations that have taken place, but I do not disagree that 
there is a role that is here.
    I think that because of public pressure, Congressional 
pressure, they did change the curriculum at the School of the 
Americas. Should there be such a school? Maybe so. Should this 
school revamp itself? Maybe so because it has a bad reputation 
from the past, but what we want to do is work together on it. 
We should not even have to worry about this. It makes all the 
sense in the world to have these lines of communication, but 
let us not fool ourselves. Let us not do to it sustain regimes 
just because we want to have some communications and liaisons 
with the military. That may not be in our country's best 
interest.
    So, on one hand, I see what the goal is. On the other hand, 
there are qualifications that should disqualify that from 
happening with certain countries. The message is Congress is 
alert to this. We know what is going on out there, one way or 
another, and the JCET to Kopassus might be something that you 
think was consistent with the intent of Congress, that is not 
what people thought happened on the floor of Congress here over 
and over again when we have voted against the IMET for 
Indonesia.
    Because this is such a miserable day that our young people 
are going to be put in harm's way probably--I guess that is the 
indication from the plane turning around--I know that everyone 
is preoccupied with that, and justifiably so.
    So I will submit my other questions.
    Mr. Lewis. Would the gentlelady yield for an interruption?
    Ms. Pelosi. I would be pleased to yield.
    Mr. Lewis. Since I have not focused on this lately, it has 
been surprising to me that as I reiterate that 90 percent of 
this kind of training actions are going through for military 
sales. So the remainder of 10 percent really is kind of a 
combination of IMET and JCET. Probably, if there is $100 
million left of that, 20 of it is in my bill and the rest is in 
foreign operations.
    If we really want to get a handle on this, we should tap 
people like Sanford Bishop who has the school in his district. 
Also, it seems to me that we ought to have a task force of 
people who are interested within the Congress to try to figure 
out where this dialogue really should go, rather than just 
presuming if we close the school down and then re-create it 
somewhere else, or close it down, period, it might be better.
    In other words, if there is real value from this kind of 
exposure by osmosis, if nothing else, for potential foreign 
military leaders, I do not think one can discard it lightly. I 
know it is not your intent to do so, but they can report back 
every year, administration after administration, and the debate 
would go on. These issues, I do not think are partisan issues. 
So if we just absolutely commit ourselves to doing something, 
it might have a positive effect.
    Ms. Pelosi. Well, I think with your attitude, that is very 
possible.
    But, Mr. Chairman, you are obviously protecting your turf, 
and justifiably so, with JCET being under the Defense 
Appropriations Subcommittee. Recognizing that the Congress 
voted in heated debate against IMET for Indonesia and it was a 
clear message about what Congress was doing, would that be 
something that you think is appropriate for the Pentagon to run 
them in the JCET program in our committee with no notification 
to Congress? They got caught because Kopassus was so 
outrageous, and then they withdrew the engagement with them, 
but is that something that you would be supportive of, that you 
would think that without any informing of you or Congress 
that----
    Mr. Lewis. Without a blanket saying yes, I think it is 
great that they did that by passage, because they got a program 
forward that was my turf, I would instead say that there was a 
clear debate. There was a discussion. There was clear interest 
on the part of Congress. Whether it is IMET that was mentioned 
or IMET plus other programs that ought to be considered, there 
should be discussion, without any question, but I do not think 
as a result of that debate in any way, shape or form, our 
committee would really change its position on JCET.
    Ms. Pelosi. But you might say that they do not want you 
going off and doing Kopassus and training people----
    Mr. Lewis. When the Secretary was here, he somewhat gave a 
commentary regarding Kopassus and what happened there. It was a 
little different from what I have heard since then, and I must 
say I would have to know more about what he has to say before I 
make a final judgment, but in the meantime----
    Ms. Pelosi. Secretary Slocombe.
    Mr. Lewis. When he was here, I thought at least he was 
saying, ``Hey, wait a minute. If all that you are suggesting is 
accurate, then maybe I would want to reconsider, but I see some 
positive things.'' I thought I heard that. I may be wrong. I 
will have to review the record.
    In the meantime, the real point is that there is a question 
here that can be benefited by effective congressional 
oversight, and our two committees ought to join together and 
see what we can do.
    Mr. Callahan. Let me bring out another factor here, too, 
and that is I do not think the State Department nor the Defense 
Department has willfully violated the intent of Congress 
because I think the authorizing committees has given them the 
authority to do that.
    We are appropriators. The authorizing committees--we have 
JCET and we have IMET and we have enhanced IMET, and we fund 
those programs. If there indeed is a problem with the 
permissiveness as outlined by the authorizers, then they are 
the ones who should correct that, not this committee.
    Mr. Lewis. Mr. Chairman, I want my report language to have 
the weight of law, no matter what.
    Mr. Callahan. And it does, but I shy away from that.
    Let me once again congratulate the gentlelady from 
California. You are the voice of the people who have great 
concern about human rights violations, and I applaud you for 
forcing the administration to comment on their report, the 
problems that you perceive to exist in some areas of the world. 
And if we are contributing to those problems by giving them 
monies, well, then we will stop giving them monies, but I 
appreciate also you all coming today.
    So, with that, unless you want to come back, we will just 
adjourn for the day.
    Ms. Pelosi. Thank you, Mr. Chairman.
    [Questions and answers for the record follow:]

        Questions for the Record Submitted by Chairman Callahan

               authorities for foreign military training
    Question. Secretary Slocombe, could you summarize the provisions of 
existing law that authorize the Department of Defense and the 
Department of State to engage in foreign military training? Were any of 
these authorities modified during the past sessions of Congress? If so, 
in what way?
    Answer. The provisions of existing law that authorize the 
Departments of Defense and State to engage in foreign military training 
include: Chapter 5, section 541, Foreign Assistance Act (FAA) (IMET 
program, including activities conducted by the Defense Intelligence 
Agency and National Imagery and Mapping Agency funded by IMET), section 
21 of the Arms Export Control Act (AECA) (training purchased under the 
Foreign Military Sales system), sections 506 and 552(c)(2) of the FAA 
(training provided under drawdown authorities--specific drawdown 
legislation could also authorize provision of training), section 1004, 
National Defense Authorization Act (NDAA) for fiscal year 1991, and 
section 1033, NDAA for fiscal year 1998 (counter-drug training), 10 
U.S.C. Sec. 401 (humanitarian demining training), 10 U.S.C. Sec. 1595 
and various NDAA provisions (George C. Marshall Center for Studies and 
related security studies centers for the African, Western Hemisphere, 
and Asia-Pacific regions), 10 U.S.C. Sec. Sec. 4344, 6957, 9344 
(Service Academy Foreign Student Program), section 30A AECA (authority 
to conduct unit exchanges by the military services), 10 U.S.C. 
Sec. 9381 (Aviation Leadership Program), 10 U.S.C. Sec. 168 (National 
Guard State Partnership Program), 10 U.S.C. Sec. 2011 (Joint Combined 
Exchange Training, which is a training program primarily for U.S., not 
foreign, personnel).
    10 U.S.C. Sec. 2011 was amended during the fiscal year 1999 
legislative cycle to include a requirement that the Secretary of 
Defense approve all proposed Joint Combined Exchange Training 
activities.
                Safeguards on Use of Funds in Both Bills
    Question: Funds appropriated through the Foreign Operations 
subcommittee are subject to the so-called Leahy amendment, which 
prohibits funds for the security forces of a country if those security 
forces have been engaged in violations of human rights. Are there 
similar restrictions that apply to the funds appropriated through the 
Defense subcommittees? If so, can I assume that there is no danger that 
the Department of Defense would attempt to get around this provision in 
the Foreign Operations bill by using funds appropriated through the 
Defense subcommittee?
    Answer. We have not and will not attempt to ``get around'' any 
statute or clear congressional directive through any means. We have 
attempted to make our activities as transparent as possible and will 
continue to work with the subcommittee to satisfy its concerns. There 
are two so-called ``Leahy Amendments,'' one typically included in the 
annual Foreign Operations Appropriations Act and the other included in 
the FY99 Defense Appropriations Act. The requirements of each amendment 
are applied to activities governed under the respective appropriations 
acts. The amendments are not identical. The difference attempts to 
recognize that foreign military training conducted with DoD funds, 
under specific authorities, is of special benefit to U.S. personnel and 
U.S. interests. Foreign military training conducted under State 
Department authorities and programs (and funded by the Foreign 
Operations Acts) may not always have the same direct benefit to U.S. 
forces. The differences between the two Leahy amendments and their 
application are directly related to the difference between training 
that is purely foreign assistance and training that may include 
benefits to the U.S. Regardless of differences between the two ``Leahy 
Amendments,'' all foreign military training activities are conducted 
pursuant to specific authorization by law.
             Allocation of Resources and Appropriated Funds
    Question. Secretary Slocombe, in your testimony you indicate that 
the value of the training identified in the report ``exceeds $800 
million''. Earlier, we were told that the value of the training was 
approximately $1 billion. In addition, you indicate that it is 
difficult to determine how much this total is appropriated, but that 
the vast majority of the funds are associated with the Foreign Military 
Sales program, or FMS, and thus include a great deal of funds committed 
by the host country.
    Can you be more precise about the funding levels? How much of these 
funds are associated with appropriations through the Foreign Operations 
Subcommittee, and how much are appropriated through the Defense 
Subcommittee?
    Answer. Of the approximately $808 million in training included in 
the Foreign Military Training Report (52,000+ discrete activities), 
only about three percent in value was conducted under DoD authorities. 
The remaining 97 percent in value fell under security assistance 
mechanisms (e.g., IMET, FMS), and therefore under the cognizance of the 
Appropriations Subcommittee on Foreign Operations. The vast majority 
falls under the Foreign Military Sales system, with financing from 
various sources including: host nation funds; Foreign Military 
Financing (FMF) grants; FMF loans; International Narcotics and Law 
Enforcement (INL) funds; or drawdown authorities. Unfortunately, while 
we can identify the funding source for any individual entry, the data 
configuration does not allow us to do so for the aggregate totals. We 
are examining ways to track and report such information for the future.
                         Decisions on Training
    Question: One of the concerns members have had about the foreign 
military training is the impression that no one is coordinating the 
decisions on where and how training will occur around the world. Can 
you provide us with an explanation of how decisions to engage in 
training are made for a particular country, and how the Department of 
State provides input into these decisions? Perhaps using the special 
forces training program as an example makes the most sense, given the 
level of concern about these activities.
    Answer. The special forces training program included in the Foreign 
Military Training Report was the Joint Combined Exchange Training 
(JCET) program. The primary purpose of this program is to train U.S. 
Special Operations Forces (SOF), not foreign military personnel. 
Nonetheless, the decision process for these activities does provide an 
example of State Department involvement in development of annual 
training plans.
    As a preliminary matter, U.S. SOF units determine their Mission 
Essential tasks--the individual steps necessary to accomplish the range 
of missions they could be assigned. Theater SOF commands and CINC SOCOM 
hold an annual JCET conference which finalizes proposed JCET training 
plans, including countries, dates and types of training proposed. Tasks 
that require, or would benefit from, training in a foreign country are 
discussed with the regional CINCs for possible inclusion with their 
respective theater engagement plans. At this point, there is enough 
information about the proposed training activity for appropriate U.S. 
embassies to be informally alerted to SOF requests for JCET activities 
in their countries. In practice, relevant embassy country teams are 
working with the CINCs' staffs virtually from the beginning of the 
planning process.
    Proposed JCET training plans are then formally transmitted to 
appropriate U.S. embassies and Main State for human rights review and 
coordination. Embassies then advise the theater CINCs, SOCOM, and OSD, 
as appropriate, of any derogatory information they may have regarding 
the human rights records of foreign forces with which training is 
proposed.
    If an embassy determines that units or individuals selected for 
U.S. training have committed gross violations of human rights one of 
two processes will ensue. Note: DoD policy is that a non-military 
member of the country team must make the determination.
    Under section 568 of the FY99 Foreign Operations Appropriations 
Act, the Department of State will not dispense security assistance 
unless the Secretary of States determines and reports to Congress that 
the host government is taking effective measures to bring the 
perpetrators to justice. If training funds are withheld pursuant to 
section 568, the Secretary of State will inform the host government of 
the basis for the decision, and ``to the maximum extent practicable,'' 
will assist the host government in taking effective measures to bring 
those responsible to justice. Until these actions are completed, 
security assistance may not be dispensed.
    Section 8130 of the FY99 Defense Appropriations Act codified 
existing DoD policy that prohibited use of DoD funds to train foreign 
security units whose members have committed gross violations of human 
rights. If DoD receives credible information from the State Department 
that foreign security forces or members of the unit(s) DoD plans to 
train have committed gross violations of human rights, the training 
will not proceed unless all necessary corrective steps have been taken. 
``Corrective steps'' may include adjusting host-nation participation, 
either by training with forces not implicated in gross violations of 
human rights or by removing the human rights violator from the unit(s) 
proposed to be trained. Once such corrective steps have been taken, DoD 
will proceed with the proposed training.
    The Department will apply the ``corrective steps'' standard 
carefully. DoD procedures require the U.S. ambassador to concur that 
the corrective measures taken by host-nation security forces are 
adequate. In addition, all training conducted in the wake of such 
corrective measures must be reported to the Office of the Secretary of 
Defense. These safeguards will ensure rigorous implementation of the 
``corrective steps'' standard.
    DoD policy, as reflected in section 8130, is appropriate for DoD-
funded training because the primary beneficiaries of combined training 
activities are often U.S. personnel, and overall readiness of U.S. 
forces. Moreover, many of these training events strengthen important 
U.S. programs such as humanitarian demining and counterdrug support.
                      Other Reporting Requirements
    Question. The transmittal letter accompanying the military training 
report that was submitted to us on March 5 indicated that the 
Administration is required to submit other reports on certain aspects 
of foreign military training?
    What are these other reports? Are they provided pursuant to law? 
Who receives them?
    Answer. In general, the Department has responded to a number of 
requests for briefings on training activities, and has included 
information on training as part of regular budget briefings to 
congressional staff. This is especially true with respect to 
counternarcotics oversight briefings. The most significant statutory 
reporting requirement related to the subcommittee's concerns is the 
annual report on Joint Combined Exchange Training (JCET) provided under 
10 U.S.C. Sec. 2011(e).

            Questions for the Record Submitted by Mr. Forbes

    Question. Under Secretary Slocombe, with the breakup of the Soviet 
Union and gradual democratization of much of the third world, military 
training missions have become increasingly busy. Do you see any 
problems associated with the increased deployments of military 
personnel on such missions overseas? Are these problems of local 
resentment of U.S. Troops as we see with the peacekeeping mission in 
Bosnia? Do such feelings pose a physical threat to our troops? Do you, 
or Mr. Newsom, fee that this poses a diplomatic problem that may hurt 
the purpose of such missions?
    Answer. In general, US training activities are not as visible or 
politically symbolic as large exercises as peackeeping missions. 
Therefore, if training were to be conducted as an ``anti-American'' 
area, it is not obvious that potential opponents would even know the 
activity was taking place. But this is the exception: anecdotal 
evidence from the commands suggests that we end up turning down many 
more requests for training than we accept in the many new democracies.
    The situation in each country, perhaps even in each training 
activity, is different, I should say from the outset that in the event 
local sentiment turns hostile toward Americans during the pendancy of a 
training activity, the activity may be relocated or cancelled entirely 
at the request of the US side to protect our personnel. It should be 
self-evident that we do not send US personnel into an unstable 
situation merely to conduct a training activity alone. The regional 
CINCs are charged with protection of our forces in all their 
deployments aboard. CINC security personnel work with State Department 
Regional Security Officers and others to ensure that if US personnel 
deploy to a tense area, the importance of their mission--be it training 
or something else--is consistent with the level of risk.
    Question. Mr. Slocombe, what asset in the US military do you 
consider best serves the needs of military training? Does this require 
additional support from Congress?
    Answer. The best asset we can call on to achieve any of our 
missions is the men and women of the US armed forces. Both the 
Administration and the Congress have announced their intent to improve 
military pay and benefits during the fiscal year 2000 appropriations 
cycle. This is the most meaningful way in which either you in the 
Congress or we in the Executive Branch can show our service members 
that we appreciate what an asset they truly are.
    Question. Mr. Slocombe, what is the most frequently requested type 
of military training assistance? Is it different from the asset you 
just described? Do we possess enough people capable of delivering this 
type of training? Do we have enough surplus arms to give to foreign 
militaries to conduct this training?
    Answer. The most frequently requested type of training relates to 
maintenance and operational training support associated with foreign 
equipment purchases under the FMS system.

            Questions for the Record Submitted by Ms. Pelosi

                             Benin Training
    Question. To illustrate the difficulty we have had in getting the 
kind if information we were looking for from this report I would call 
your attention to an item in Volume III. With respect to the country of 
Benin the report indicates that an MTT will take place sometime in 1999 
costing $1,037,048 for Miscellaneous Operations where one member of 
Benin's Army will be trained. I assume there is a more descriptive 
explanation for this planned activity.
    Answer. Mobile Training Teams (MTTs) never train just one 
individual; typically, they train 20-30 students at one time. Because 
this MTT is a projected future activity, the exact number of students 
to be trained is unknown. The number 1 was simply used as a placeholder 
in the report database until the final number is known. The report 
represents a statistical ``snapshot'' of training activities underway 
or planned as of December 1998. DoD components were directed to report 
national plans for 1999 training activities even if some of planning 
elements were incomplete at that time. The scope of the report and the 
time available to complete it necessitated certain formatting decisions 
that resulted in the anomaly described in this question.
                                Colombia
    Question. The subcommittee spent considerable time discussing the 
deployment of US special forces to Columbia to train a Counter 
narcotics battalion of the Colombian Army in our recent Security 
Assistance hearing. This is an instance where decisions have been made 
by the Administration which have overwhelming foreign policy 
implications and in which Congress has had no role.
    In addition to this program the report before us shows significant 
amounts spent for both IMET and Other security assistance training, 
which we expect in conjunction with our counter narcotics program. 
However, the report also indicated that in 1998 nine different JCET 
deployments occurred training 450 Colombian personnel at a cost of $1.2 
million. In 1999 25 different JCET deployments are planned costing over 
$3 million benefiting well over 1,000 different personnel from all 
branches of the Colombian military as well as the police. What benefits 
do US troops gain from this level of engagement with one country?
    In our prior hearing the DOD witness indicated that the decision to 
train this battalion had not been finalized, and that this somehow 
justified the lack of Congressional consultation. Since the first 
deployment of our trainers is expected as soon as April, can you 
indicate the status of our policy and indicate when, if all, Congress 
will be consulted.
    Answer. DoD conducted only one Joint Combined Exchange Training 
mission in Colombia during 1998 and nine counterdrug (CD) missions. 
Whether deploying to conduct JCETs or CD missions, SOF personnel 
enhance their language abilities, cultural awareness, and operational 
skills. However, JCETs and DoD counterdrug missions differ in who is 
intended to receive the benefit of training. In CD missions, Colombian 
counterdrug forces, rather than our deployed SOF, are the intended 
beneficiary of the training. CD missions are designed to improve 
Colombian counterdrug unit's ability to detect, monitor, and interdict 
drug trafficking and support the U.S. National Drug Control Strategy. 
The level of effort given to Colombia directly relates to the level of 
drug threat presented by known drug trafficking. Because the drug 
threat to the United States posed by activities in Colombia continues 
to increase (due in large part to interdiction successes elsewhere in 
theater), the level of effort in Colombia will continue to increase.
    The Colombian CD battalion concept emerged from discussions between 
USSOUTHCOM and the Colombian Ministry of Defense and between Presidents 
Clinton and Pastrana in October 1998. Throughout the evolution of the 
CD battalion concept, DoD communicated with congressional staff having 
oversight of DoD counterdrug authorities. In March 1999, when the CD 
battalion concept took on consistent form and substance, we formally 
briefed the Congress. Then as now, DoD supports the training and non-
lethal equipping of a human rights vetted, Colombian light infantry 
battalion dedicated to counterdrug operations focused in the heart of 
the Source Zone. We undertake these activities pursuant to specific 
legal authorization.
    Question. Can you explain how the deployment of 20 US Special 
forces for 90 days to one location in Colombia to provide basic 
training to Colombian Army recruits will benefit the readiness of the 
US armed forces?
    Answer. Special Forces soldiers benefit each time they deploy into 
a potential theater of operations through enhancement of their 
language, cultural awareness, and operational skills. With each 
deployment SOF members increases their understanding of the area of 
operations and expand the host-nation's ability to act in concert with 
the United States.
    Question. There are no resources budgeted to equip this counter 
narcotics battalion to my knowledge from our budget. Clearly the 
Colombians expect this unit to have modern equipment and to have an air 
mobile capability. Where are those resources going to come from?
    Answer. DoD will use service Operations and Maintenance funds under 
the control of US SOUTHCOM to conduct training of the unit pursuant to 
section 1004 of the National Defense Authorization Act (NDAA) for 1991. 
DoD will provide $3.5 million in modern, non-lethal equipment to the CD 
battalion pursuant to section 1033 of the NDAA for 1998. DoD has 
encouraged the Colombian military to identify long-term sources of 
national funds to meet its mobility needs since DoD has neither the 
authority or the resources to acquire helicopters for Colombia. In our 
discussions with the Colombian Ministry of Defense, we have recommended 
that the battalion's mobility requirements be met with current 
Colombian Air Force, Army, and National Police rotary wing assets.
    Question. Explain the different standards used to vet Colombians 
personnel receiving training from US government sources?
    Answer. The term ``vetting'' refers to the process where U.S. 
Embassies and the Department of State review the available data on host 
nation security forces, and members of such forces, for information on 
gross violations of human rights. The DoD does not conduct or 
participate in the vetting process. The details of the vetting process 
are accomplished at the relevant U.S. Embassy. The vetting process 
starts at the relevant U.S. Embassy when the host nation identifies the 
security force, or the individual, that is going to be trained, receive 
equipment, or train with U.S. forces. The organization and management 
of the vetting process may vary by embassy, because each ambassador can 
establish his/her embassy internal procedures and may assign 
responsibilities for vetting within the country team differently. The 
resulting human rights review information is provided by the embassies 
to the Department of State and to the appropriate DoD agency for 
action. Essentially, there is no difference between the vetting process 
for assistance provided under foreign operations authorities and the 
vetting process for training activities conducted under defense 
authorities.
    Under DoD-funded training activities, if the embassy notifies the 
regional CINC that the Department of State has credible information of 
gross human rights violations by a host nation security force, or a 
member of such a force, with which the DoD was planning to train, then 
before the training activity may proceed all necessary corrective steps 
must be taken. This process was codified in section 8130 of the FY99 
Defense Appropriations Act. Under DoD policy, in cases when we receive 
credible information from the Department of State that a member of such 
a unit has committed a gross violation of human rights, the application 
of ``corrective steps'' can include adjustments to the host nation 
participants, which could be made either by training with a host nation 
security unit not implicated in human rights violations, or by removing 
the identified violator/s from the units to be trained. Once these 
corrective steps have been taken, DoD can proceed with the training.
                 Service Sponsored Academy Scholarships
    Question. [Handelman] The report indicates that over 150 
individuals from many different countries attend West Point, the Naval 
Academy or the Air Force Academy under ``Service sponsored, Academy 
exchanges''. Does DOD pay for that many scholarships to our Service 
Academies and what is the justification?
    Do these scholarships displace otherwise worthy candidates from 
this country?
    Answer. The service academy foreign student program is conducted 
pursuant to sections 4344, 6957, 9344 of title 10. Another more limited 
exchange program is conducted by the U.S. Air Force Academy. Up to 
forty foreign students may attend each academy at any one time, subject 
to the same admissions standards prescribed for U.S. citizens. 
Admission of the foreign students is not required: the academies 
measure the quality of the foreign applicant pool against the quality 
of the U.S. pool and issue acceptances accordingly. Thus, it is not 
necessarily the case that the foreign students' presence displaces a 
``worthy'' American applicant, although they could displace a lesser 
qualified U.S. applicant. Decisions on admission qualifications are 
left entirely to the academies.
    The foreign students participate in the full, four-year program of 
study. The Secretary of Defense is authorized to waive full tuition for 
up to five foreign students per academy at any one time; in addition, 
up to 35% of tuition can be waived for the balance of the foreign 
cadre. The current limits were enacted for fiscal year 1998; the 
Secretary was previously authorized to waive all costs for up to all 
forty foreign students permitted to attend each academy at any one 
time. In response to the fiscal year 1998 restrictions, the Department 
revised the criteria governing cost waivers to better reflect current 
U.S. national security and foreign policy interests.
    The foreign student program affords U.S. cadets and midshipmen 
exposure to highly qualified potential foreign military leaders, while 
facilitating military-to-military relationships. The program is 
strongly supported by the academy superintendents and OSD from both 
educational and foreign policy perspectives. The flexibility to support 
foreign student attendance through the waiver authority has proven to 
be a key factor in generating interest in the program and the 
Department is seeking to restore some of the pre-1998 flexibility.
                               Indonesia
    Question. Recent news articles have highlighted JCET deployments to 
Indonesia as a primary example of a significant foreign policy decision 
being made by the Administration without Congress being informed. Mr. 
Slocombe in your statement you deny ignoring the letter or spirit of 
the law, or that you evaded Congressional oversight. I would like you 
to respond to the case of Indonesia specifically. As you know Congress 
through this subcommmittee acted to prohibit IMET training to Indonesia 
starting in the late 1980's. The DOD in the early 1990's offered 
Indonesia the opportunity to buy IMET training without informing 
Congress. Indonesia has continued to be eligible for expanded IMET only 
since the early 1990. Despite these restrictions the DOD through the 
JCET deployments started an aggressive training program with the 
Indonesian Army and its intelligence forces. Congress has consistently 
expressed its concerns about the behavior of those forces, particularly 
in East Timor. We could debate the usefulness of this training in 
making the Indonesian Army more professional, but first I would ask, do 
you think that DOD was responsive to Congress in keeping them informed 
as you moved forward with the JCET and other training programs?
    Answer. The Department of Defense has been responsive to requests 
from Congress for information on training activities in Indonesia. For 
example, Representative Lane Evans requested information on this 
subject on two occasions and the Deputy Secretary of Defense responded 
in detail on February 13th and July 15th of 1998. Also, during the 
spring and summer of 1998 the Assistant Secretary of Defense for 
International Security Affairs (ASD/ISA) provided a series of briefings 
to Congressional staff members on training in Indonesia and the basis 
for the Joint Combined Exchange Training (JCET) activities. During a 
formal hearing before the International Operations and Human Rights 
Subcommittee of the House International Relations Committee on July 24, 
1998, the DoD witness, ASD/ISA, addressed the fact that DoD training 
activities in Indonesia (including all JCETs) were ``on hold.'' It is 
also important to note that JCET activities are not within the IMET 
umbrella, so restrictions imposed by Congress on IMET did not affect 
DoD plans for the JCET program.
    Question. Given the recent events in Indonesia and the 
involvement of the Army and intelligence forces in putting down 
riots and possibly interfering with the emerging political 
parties, how do you assess the affect of our training?
    Answer. The Department firmly supports the principle that 
we should not train foreign security units whose members have 
been credibly implicated in gross violations of human rights, 
unless all necessary corrective steps have been taken. This 
policy was codified in Section 8130 of the FY99 Defense 
Appropriations Act. The Department abhors the killing of 
civilians in Indonesia during the disturbances. During JCET 
activities we instruct counterparts on human rights and 
appropriate behavior of military forces in both conventional 
and unconventional situations. Nevertheless, in Indonesia and 
elsewhere, host nation forces engaged in riot control or other 
stressful sometimes do not adhere to every principle, or retain 
the discipline, they may have been taught during activities 
with U.S. forces.
    Overall, we feel that these training activities have 
certainly not hurt, and have likely helped the situation in 
Indonesia. In many cases, although clearly not all, the 
security forces have acted professionally and with restraint as 
they struggle to maintain order. Further, the Army leadership 
has been clear and public with its support of free and fair 
elections and has instructed all its members to not get 
involved in the elections and to stay removed from politics.
    It would be incorrect to claim that positive statements by 
military officials are the direct result of their participation 
in JCET or other U.S. training activities. However, neither is 
it correct to suggest that violence against civilians by some 
members of foreign militaries results from, or is even 
facilitated by, exposure to U.S. training activities under JCET 
or other programs.
    Question. Was Congress informed of your apparent decision 
in May of 1998 to cease JCET activity in Indonesia, and if so, 
how were they informed?
    Answer. During the spring and summer of 1998 the Assistant 
Secretary of Defense for International Security Affairs 
provided a series of briefings to Congressional staff members 
on DoD training in Indonesia, to include the basis for Joint 
Combined Exchange Training (JCET) program activities in 
Indonesia. The moratorium on training activities in Indonesia 
was covered in those briefings. The cessation of JCET 
activities in May 8, 1998, was also noted in the information 
the Deputy Secretary of Defense provided in his response on 
July 15, 1998 to Representative Lane Evans who had requested 
data on DoD training activities in Indonesia. During a formal 
hearing before the International Operations and Human Rights 
Subcommittee of the House International Relations Committee on 
July 24, 1998, the Assistant Secretary of Defense for 
International Security Affairs addressed the fact that DoD 
training activities in Indonesia (including all JCETs) were 
``on hold.''
    All DoD bilateral activities with Indonesia have been 
conducted in accordance with the law. The DoD has never 
attempted to circumvent the will of the Congress regarding our 
training activities in Indonesia. Although Congress prohibited 
IMET funding for Indonesia from fiscal year 1993 to Fiscal Year 
1996, other forms of bilateral military interaction, including 
foreign military sales of training and exercises, were not 
proscribed. 10 U.S.C. Sec. 2011 authorizes U.S. Special 
Operations Forces to conduct training with friendly forces 
abroad, including Indonesia. The Department has reported to 
Congress on section 2011 activities, in Indonesia and 
worldwide, as required.
    DoD officials have consistently indicated that we remained 
engaged with the Indonesia military, until 8 May 1998, through 
a variety of exchanges, exercises, visits, and training 
activities. We have not attempted to hide that fact. To the 
contrary, we have sought to articulate why the pursuit of such 
an interaction is an important component of our East Asian 
security strategy.

                    JCET Training in Other Countries

    Question. The JCET report indicates that the Armed forces 
of a country in Northern Africa will travel to Turkey to 
receive JCET training from U.S. forces. Can you explain why 
this is happening? Who pays for the transportation costs for 
the foreign troops? Is this a common practice? Are Turkish 
troops participating in this training?
    Answer. The JCET portion of the Military Training report 
contains an error that could create the impression the Tunisian 
forces are training with Turkish forces (page CL-II-40). There 
were two exercises that should have reflected Turkey as the 
country vice Tunisia. U.S. Special Operations Forces (SEAL 
Team-4) trained, in Turkey, with Turkish SEALs during the 
period October 4-28, 1997. U.S. Special Operations Forces (3/10 
SFG) trained, in Turkey, with Turkish Commandos during the 
period August 6-21, 1998. We regret any confusion by the error.
                               Readiness
    Question. The state of readiness of our Armed Forces is deplorable 
according to many in Congress and at the Pentagon. Intelligence and 
Defense related committees have heard that we are ``stretched thin'' 
from Pentagon witnesses. We have arrived at this state because of 
inadequate budgets and the deployment of too many US troops to too many 
foreign countries for too long, according to some ``Congressional 
experts''. You have stated that training does not affect OP TEMPO or 
morale. Can you quantify for me the number of troops deployed, the time 
frame of those deployments and how that foreign training affects a 
unit's own training regime?
    How many US troops in total have been deployed for training of 
foreign troops in the past two years from how many different units?
    Answer. We are not able to quantify numbers of US troops deployed 
on training missions or the time-frames for those deployments in a 
timely fashion. Such information is not recorded in a central 
location--or even in a finite number of primary locations around the 
world--and would need to be developed virtually by hand.
    The reason that we know foreign training does not affect OPTEMPO or 
morale is that foreign training, in nearly all respects, is part of the 
regular job description for those service members who perform this 
function. When OPTEMPO and morale among our forces becomes strained it 
is the result of unplanned contingency deployments away from their 
current stations for extended periods. A US service member who is 
deployed to perform foreign training might well be stationed abroad, 
and might well be displeased by that fact. However, the service 
member's overseas posting is almost never for the express purpose of 
training foreign military personnel. In other words, his morale might 
be strained whether or not foreign training was part of his job. 
Moreover, his actual training deployment would rarely be on anything 
other than a scheduled basis. Indeed CINC's regional engagement plans 
are developed for an entire upcoming year: in virtually no case can a 
US service member be deployed ``by surprise'' for the singular purpose 
of foreign military training.
    Another reason that training of foreign military personnel does not 
drain readiness is because it is the regional CINCs, the commanders 
literally ``on the front lines,'' who consistently place training at 
the top of their regional engagement strategies. A CINC who feels that 
training is impinging on the resources necessary for his primary 
mission is always free to either cancel scheduled training events, or 
to direct his staff to developed a scaled-down foreign training program 
for the future. I can assure the subcommittee that if a regional CINC 
is presented with a choice between devoting resources to foreign 
training or providing pilots sufficient flight hours to maintain combat 
proficiency, the flight hours will always win.
                               Guatemala
    Question. (DSCA-LPP) An analysis of the five volume report 
indicates that Guatemala in FY 1999 can expect funding for 25 IMET 
students in 14 different courses, the deployment of two Mole (Mobile?) 
Training teams to Guatemala, a separately funded course for 4 students 
at the National Center for Hemispheric Defense studies, two students 
attending the US Military Academy at West Point and the deployment of 
US forces in conjunction with JCET exercises in country. This all is 
taking place in the context of this subcommittee limiting Guatemala to 
expanded IMET only in 1999.
    With respect to IMET in 1999, plans include sending 7 students to 
the School of the Americas for 3 different courses including 2 students 
to the Command and General staff course. Can you explain how these 
Schools of the Americas courses fit the definition of expanded IMET?
    How does US Army Mobile Training Team deployment to Guatemala 
planned for FY 1999 with IMET funds fit the definition of expanded 
IMET?
    The FY 1999 JCET deployments are for counternarcotics purposes 
according to the report. Can you explain what units of the Guatemalan 
Army are involved and how the training they are receiving fulfills 
counter narcotics goals?
    Answers. Before responding to the specific questions included in 
this section, two important points must be made. First, the Department 
has explained that the Foreign Military Training Report constituted a 
``snapshot'' of DoD and State Department training plans as of December 
1998. The numbers included in the report for FY99 activities were 
notional at best. Second, U.S. support for Guatemalan participation in 
NDU or U.S. Military Academy programs is provided pursuant to law and 
funded with appropriate DoD resources. Foreign participation in the 
Department of Defense's regional centers for security studies (Western 
Hemisphere Center, Marshal Center for European studies, Africa and 
Asia-Pacific centers), and in our undergraduate military education 
programs through the U.S. service academies are among the most valuable 
means we have to immerse foreign officers and future leaders in our 
professional military culture.
    (1) There are no Military Training Team deployments to Guatemala 
scheduled for FY99, Military Training Teams carry out general IMET 
education functions. There are three Military Education Team 
deployments scheduled for Guatemala in FY99, dealing with civil 
military relations, defense resource management and disaster relief, 
respectively. The Military Education Team concept was developed 
specifically to carry out E-IMET programs.
    (2) The US Army School of the Americas (USARSA) curriculum includes 
E-IMET-certified courses. Thus, the attendance of Guatemalan personnel 
at USARSA during FY99 is not contrary to the FY99 Foreign Operations 
Appropriations Act restriction of IMET to Guatemala (provided that they 
attend only E-IMET courses, which will be the case). The year-long 
USARSA Command and General Staff Course has been approved as an E-IMET 
course of study since it includes over 200 hours of human rights-
related activities. Thus, the participation of Guatemalan officers in 
this course is not contrary to the FY99 Foreign Operations 
Appropriations Act restriction on IMET to Guatemala.
    (3) The JCET references to counter-narcotics activities may have 
been for planning purposes, or may indeed have been an error on the 
part of US SOCOM. It is now DoD policy not to conduct JCET activities 
for counter-narcotics purposes. Experience has shown that few counter-
narcotics tasks directly related to the Mission Essential Tasks of U.S. 
SOF personnel. JCET training is for the primary purpose of improving 
SOF personnel readiness to execute mission essential tasks.
             Allocation of Resources and Appropriated Funds
    Question. The report contains a large category of training entitled 
Other Security-Assistance Managed Training which contains training 
activity from a number of different sources. What are the different 
sources of funding and why are they lumped in one large category.
    Answer. The structure of the security assistance portion of the 
report was driven primarily by the parameters of the existing security 
assistance record-keeping system maintained by the Defense Institute 
for Security Assistance Management (DISAM) located at Wright-Patterson 
Air Force Base. DISAM collects data on the security activities overseen 
jointly by the various Defense and State policy components, and 
executed by the Defense Security Cooperation Agency.
    Specifically, we are able to break out the IMET-funded portion of 
security assistance-related training because it is recorded separately. 
Training that is funded through the Foreign Military Sales (FMS) system 
cannot be broken down into separate categories because the DISAM 
database does not identify the source of funding for such training (or, 
for that matter, any of the other defense articles or services that may 
be purchased under the FMS system). As you know, purchases under FMS 
may be funded through U.S. grant assistance (Foreign Military Financing 
[FMF]), loans underwritten by the U.S., or through foreign countries' 
own resources. As I noted in my prepared statement, we have already 
recognized the usefulness of being able to distinguish foreign-financed 
FMS purchases, at a minimum, and are exploring modifications to the 
database that would make this possible.
                   Responsiveness of Training Report
    Question. How can you back up your claim that 97% of training in 
this report is from FMS or commercial sources.
    Answer. We have said that 97% of the activities described in the 
report are conducted under security assistance authorities. We know 
this because the security assistance data base generated 97% of the 
total number of activities included in the report, and we believe that 
the report successfully described the total spectrum of foreign 
training conducted by the Departments of State and Defense.
    Question. Explain the basis for your claim that the vast majority 
of U.S. training and engagement activities require no additional 
separation of U.S. military personnel from their families, put no 
service members at risk of life or limb, and do not effect the OP 
TEMPO.
    Answer. (1) The vast majority of U.S. training and engagement 
activities require no additional separation of U.S. military personnel 
from their families because the vast majority of training is a 
``normal'' duty of the service members who perform these functions. In 
other words, it may well be the case that a U.S. service member is 
forward deployed in Europe or Japan, and that this service member is on 
an unaccompanied tour (e.g., the service member's family remained in 
the United States rather than moving overseas). The service member in 
this case is already separated from his or her family, and training of 
foreign forces may be one of his or her duties. But the training is not 
the cause of the separation. Similarly, service members may be assigned 
temporary overseas duty for purposes of training foreign forces. While 
this activity would likely entail separation from family, the service 
member is equally likely to be assigned temporary overseas duty for any 
number of purposes associated with his or her mission that have no 
relation at all to foreign training. The important point is that the 
vast majority of training of foreign forces is a programmed, routine 
event: it is not conducted as a ``contingency operation,'' which jars 
the rhythms of both families and regular military operations.
    (2) I said in my prepared statement that training ``puts no U.S. 
service members at increased risk to life or limb'' because training 
activities are no more dangerous when conducted with foreign militaries 
than when conducted among U.S. personnel only. A particular activity 
might well be extremely dangerous, as is the case for many of the day-
to-day tasks undertaken by our service members. Yet, teaching the 
activity to a foreigner in an appropriately controlled environment will 
not put the U.S. service member at any greater risk than teaching the 
activity to other U.S. personnel. Most importantly, we only send our 
military personnel in harm's way when national interests are important 
enough to warrant such a risk. The many benefits of foreign training 
that accrue to the United States typically are not of such weight as to 
justify an increased risk to U.S. military personnel.
    (3) As I noted in responding to question 19, above, the reason that 
we know foreign training does not affect OPTEMPO or morale is that 
foreign training, in nearly all respects, is part of the regular job 
description for those service members who perform this function. When 
OPTEMPO and morale among our forces becomes strained it is the result 
of unplanned contingency deployments away from their regular stations 
for extended periods. When military commanders and others complain that 
U.S. forces are being stretched too thin, it is not in any respect the 
result of foreign military training.
    Question. (Curry) Can you submit a key to the numerous acronyms 
used in this report.
    Answer. This is very difficult to answer without an indication of 
which acronyms are in question. The most-used acronyms (e.g., IMET, 
FMS, JCET, CD) are identified in the narrative materials preceding each 
section. We will be happy to provide a timely explanation of any 
specific acronyms still not clear, if you will identify them to us.
                                          Thursday, April 15, 1999.

                           SECRETARY OF STATE

                                WITNESS

HON. MADELEINE K. ALBRIGHT, SECRETARY OF STATE

                 Chairman Callahan's Opening Statement

    Mr. Callahan. Good morning, Madam Secretary, and welcome 
home. We are going to try to end this meeting early enough for 
you file your income taxes today.
    This hearing was originally scheduled to discuss the fiscal 
year 2000 budget request, but events in the Balkans have 
directed us into a higher priority at this time. And the 
Speaker has asked the committee to take this opportunity to 
bring up the crisis in the Balkans with you. Because of the 
interest in the NATO air campaign against Serbia and its effect 
on the people of Kosovo, the Chairman and ranking Democratic 
Member of the full committee, as well as the Chairman of the 
defense subcommittee, are present. They will receive priority 
recognition after the Secretary has completed her testimony.
    With everyone's cooperation, we can cover both the budget 
request and the Balkans and still leave time if we will respect 
the 5-minute rule for all Members to have input.
    The Speaker has set out two goals for the House this year. 
One is to pass the budget resolution by April 15, which was 
passed yesterday. And second, he would like to move the House 
appropriation bills to conference before July 4. I would like 
to move the foreign operation bills to the floor before the end 
of May. And I don't expect Chairman McConnell to lag very much 
behind us.
    Secretary Albright, your concerns about the new 
congressional budgets are well known. While I don't know what 
our 302 allocation is going to be, whatever it is, I intend to 
live with the number we receive from the full committee. I want 
to work with you on a bill that fits within our allocation. If 
you cannot accept a dollar less than the request, as was the 
case last year, then the committee must carry out its mission 
nonetheless. We will write a bill that passes the House; and, I 
repeat, I welcome your help in trying to draft that bill within 
the 302 allocations.
    Madam Secretary, before we turn to other critical issues I 
would like to bring to your attention that we already have a 
Central American supplemental that is ready for conference. 
Those hurricane victims are our neighbors in this hemisphere; 
and simply because the news networks have chosen to focus on 
the flood of refugees fleeing Kosovo, the pressing needs of the 
Hondurans and Nicaraguans have not diminished. We need your 
help, and we need the help of the President to get that Central 
American supplemental enacted quickly. That means sitting down 
and working out the offset problem the administration objects 
to. Any day we expect another supplemental request for Kosovo 
and its neighbors. Most of that is to restore our national 
defense posture, but I expect the White House will send up a 
request for hundreds of millions of dollars from this 
subcommittee for humanitarian assistance.
    Unlike the Gulf War in 1990, no other countries are 
contributing to the American costs. Between 80 and 90 percent 
of the combat aircraft will be American. As I told the 
President on Tuesday, this war is Europe's war and it is 
Europe's neighborhood; and Europe should provide ground troops 
if they are needed. As the crisis drags on, Americans will 
focus on any discrepancy between European and United States 
costs. Our public and private response to refugee needs will 
continue to be generous, but I wouldn't count on American 
financing to reconstruct what our bombs and missiles have 
destroyed.
    The committee requires an up-to-date accounting for both 
military and humanitarian contributions to the alliance effort. 
And we want you to provide us that information on a monthly 
basis.
    Any emergency supplemental for Kosovo will pay for this 
fiscal year's costs. We still have to deal with Kosovo 
appropriations for next year. We can't pretend that the crisis 
and its costs will magically disappear before September 30. We 
will welcome your assessment on the impact of this war on the 
fiscal Year 2000 budget. That assessment could be based on two 
outcomes: the alliance swiftly meeting the five goals NATO 
agreed to earlier this week, and the Kosovars are able to 
return home with international protection before the end of the 
year; or Milosevic continues in defiance of NATO and continues 
to kill and expel the Kosovars and a million or more Kosovars 
are refugees. At the same time, we are trying to limit the 
effect of these refugees on Serbia's neighbors. In any case, 
our regular bill will be forced to reflect the radically 
changed international situation. If Bosnia is any guide, we 
will still be paying for Serbian's rampage into the next 
century.
    On two other Kosovo matters, we must do everything we can 
to protect democratic Montenegro which has already welcomed 
many thousands of refugees from Milosevic. We must do all we 
can to protect our POWs and humanitarian workers who are in 
Serbian prisons.
    Finally, Madam Secretary, two proposed initiatives for next 
month will receive close scrutiny as we mark up our foreign 
operation bill next month. First, there is a proposal to 
increase aid to Russia. Does this look less compelling right 
now in light of new questions regarding espionage at our 
national weapons labs?
    Second, should we appropriate the Wye River request before 
we know whether a new government in Israel will fully implement 
the Wye agreement? The President, Secretary Cohen, and General 
Shelton have spent a lot of time with Members of Congress in 
serious two-way discussions about the crisis in Kosovo, but 
this is our first opportunity to engage the Secretary of State 
since the air strikes started.
    I will now recognize Ms. Pelosi for an opening statement.

                     Ms. Pelosi's Opening Statement

    Ms. Pelosi. Thank you very much, Mr. Chairman. I am pleased 
to join you in welcoming the distinguished Secretary of State 
to our final hearing on the fiscal year 2000 budget request for 
foreign operations. While we will undoubtedly spend most of our 
time discussing Kosovo, I do want to raise several other budget 
and policy issues first, though I want to compliment the 
Secretary for her courageous leadership and for the strong 
position she has taken at this critical time. I especially want 
to commend her for her leadership in working with the NATO 
alliance and keeping the alliance unified and focused on 
Kosovo.
    There will, of course, be many questions about the 
decisions that have been made; and, as you know, there are 535 
different ideas in the Congress about how to resolve this 
crisis. But there are no easy answers; and the implications of 
not acting boldly to stop Milosevic now, I believe, are 
staggering. Congress will undoubtedly debate and vote on U.S. 
involvement in Kosovo in some form in the near future. Some 
will say with the benefit of hindsight that we should have 
anticipated Milosevic's move on the Kosovars after the 
discussion at Rambouillet. The use of ground troops, as 
mentioned, will be debated. Some will call for accelerated 
bombing of Serbia. But again I want to express my strong 
support for the Secretary and, indeed, President Clinton for 
their leadership in this crisis.
    As the horrors of the refugee crisis become more and more 
evident, including the use of rape as a weapon of war, Congress 
must act to demonstrate the resolve of the U.S. to finish what 
we and NATO are involved in there. It will not be easy. It will 
not be inexpensive, Mr. Chairman; but we must stay united and 
focused.
    While everything else is occurring in the shadow of the 
events in Kosovo, as you mentioned, Mr. Chairman, there are 
many other issues that we want to deal with. I particularly 
would like to acknowledge and applaud the administration's 
decision to pursue a resolution condemning China's human rights 
abuses at the Human Rights Commission in Geneva. As you know, 
Mr. Chairman, the House unanimously passed a resolution 421 to 
0 and the Senate 99 to 0 urging the administration to pursue 
this resolution this year and to take all the measures 
necessary to win at Geneva. I am pleased that the 
administration responded, and I will be interested to hear the 
Secretary's progress report on the administration's efforts to 
lobby other countries to support this resolution.
    I also want to commend the administration for the honesty 
in its Human Rights Country Report on China this year. Many of 
us feared there would be a whitewash of the China record. I 
commend the State Department for its country report. I think it 
follows that we should then pursue the resolution at the U.N. 
on the strength of the information in the country report.
    I want to also take a moment to express my concern about 
the safety and well-being of a prominent Chinese reformer, Bao 
Tong, a former senior party official currently under house 
arrest in Beijing, having spent all the time since the 
Tiananmen Square massacre, nearly 10 years, in prison. He is 
now under house arrest.
    In late March, Bao Tong sent a letter to China's President 
and other leaders calling for the reversal of the official 
verdict on the Tiananmen Square events. As Premier Zhu Rongji 
is being wined and dined here in the United States, four 
officials of the Chinese Public Security Bureau have visited 
Bao Tong at home to inform him that his letter endangered state 
security. He endangered state security by asking for the 
reversal of the Tiananmen Square verdict. ``Endangering state 
security'' is a charge used against many critics of China's 
government and to deliver other threatening messages.
    The intimidation of dissidents in China continues. 
Following the President's visit last June, some Chinese, 
including Xu Wenli, started to form a democratic party in 
China. Xu Wenli is now serving a 13-year sentence for trying to 
form a political party there.
    I hope that the Secretary will use her good offices to 
communicate to the Chinese government directly that such 
attempts to muzzle its critics are not going unnoticed and 
should be stopped. There are, of course, a number of other 
issues relating to China which I would be interested in 
discussing with the Secretary. But as you have said, Mr. 
Chairman, we don't have all the time. So, I just wanted to put 
those concerns on the record.
    On the budget levels, the cuts contained in the budget 
resolution of the majority, if realized, will devastate foreign 
aid programs and irreparably damage our national security. Cuts 
in the international affairs function of 15 to 25 percent 
implied in the budget resolution would force the U.S. to close 
embassies, cut back on assistance to all regions of the world, 
including the Middle East, and require the U.S. to take a back 
seat to other countries in the international banks, the U.N., 
and other international organizations. I intend to give the 
Secretary the opportunity to comment on these budget cuts in 
her testimony.
    It is also important that we not lose sight of the 
reconstruction needs in Latin America, which our distinguished 
Chairman has mentioned as a result of the recent natural 
disasters. Congress has once again gotten itself hung up on the 
question of offsets and this has delayed this much-needed 
assistance. The need to appropriate billions to pay for Kosovo 
will force us once again to address the offset question. I hope 
we can act expeditiously to get the assistance flowing. Clearly 
the Central American supplemental should be funded as an 
emergency without offsets.
    Other concerns I intend to raise are military training, 
infectious diseases--our Chairman has been a leader on child 
survival--U.N. arrears, and our relationship with Russia, if 
time allows. I look forward to the Secretary's testimony and 
once again commend her for her courageous leadership. We are 
all very proud of you, Madam Secretary. Thank you, Mr. 
Chairman.
    Mr. Callahan. Thank you, Ms. Pelosi. Madam Secretary, we 
have received your 32-page statement. We invite you, if you 
want to take the time, to share it with the world. But if you 
choose to abbreviate, that is your prerogative. Your statement 
will be made a part of the record.

                 Secretary Albright's Opening Statement

    Secretary Albright. Thank you very much, Mr. Chairman and 
Ms. Pelosi and members of the committee. I am very pleased to 
be here, although if I had my choice of dates to come and ask 
you for money, April 15 would not be it.
    As you said, you have my written statement, which I do urge 
you all to review. It covers a lot of the important subjects 
and parts of the world that I am not going to be able to 
discuss today. But I think that it is important that people 
understand the complexity and the range of issues that we deal 
with. I will try to be briefer than 32 pages, but there are 
some issues that I need to get on the table.
    Events of the past year, especially in the Balkans, the 
Gulf, Asia and Africa, illustrate the range of perils that 
exist as we approach the new century. I come before the 
subcommittee in search of the tools and resources that we need 
to respond to those perils and to seize the opportunities for 
ensuring our security and promoting our prosperity and 
upholding our values. And I must say that this subcommittee has 
generally supported adequate funding for international 
programs, and for that I thank you and salute you.
    This year, however, the proposed congressional budget 
resolution would require a reduction of 15 percent in the 
amount requested by the President for international affairs. 
This is tantamount to surrendering American leadership around 
the world. Anyone who says that we should do more to counter 
terror or fight drugs to halt proliferation or promote American 
exports or prevent the abuse of human rights should agree that 
it is not possible to accomplish any of these goals without 
resources. This is not a partisan issue. This is a call for a 
strong U.S. foreign policy that comes from leaders of both 
parties. And I hope very much that we can work together as we 
have in the past, not only on our overall fiscal Year 2000 
request for international affairs but also, as you have 
mentioned, on our supplemental request for Jordan and to aid 
the recovery of hurricane victims in Central America and the 
Caribbean. We need to find a way of doing that without raiding 
our priority programs.
    In addition, the President will submit shortly an emergency 
supplemental request to cover the costs related to the crisis 
in Kosovo. The request will include funds for life-saving 
humanitarian relief, assistance to embattled frontline states, 
and other urgent requirements. If ever there were an emergency, 
Mr. Chairman, this is one. We are not in this alone, for we 
have friends in Europe and elsewhere who are providing a large 
quantity of help, and we can get more specific on that in the 
questions.
    We do have to do our part. Thus, I will be urging the 
subcommittee's support for prompt actions on the portions of 
the request that will fall within your jurisdiction. I also ask 
your support for our policy on Kosovo. We are confronting an 
outrage we cannot accept, and only we and our allies have the 
muscle to oppose.
    President Milosevic has unleashed a rampage of ethnic 
cleansing and genocide directed at the expulsion or total 
submission of the Kosovo Albanian community. We have all seen 
the images of families uprooted and put on trains, children 
crying for parents they can't find, refugees recounting how 
their loved ones were led away, and ominous photos from the sky 
of freshly upturned earth. Behind these images is a reality 
grimmer than any seen in Europe for more than half a century. 
And make no mistake, this campaign of terror was not a result 
of NATO action; it is a Milosevic production.
    The region-wide killing, raping, shelling, burning, and 
deporting were as meticulously planned as they are being 
ruthlessly carried out. That is why force became NATO's only 
option after the diplomatic solution we offered and reoffered 
at Rambouillet was rejected over and over again by Belgrade.
    Today our values and principles and our perseverance and 
our strength are being tested, and we must be united at home as 
we are with our allies overseas. And we must do all we can to 
ease the suffering of the refugees and other victims. We must 
and will persist in gathering evidence and documenting the 
truth to help the war crimes tribunal hold perpetrators 
accountable. And while continuing to strive to minimize 
civilian casualties, we must strike and strike again until an 
outcome that meets the demands of the international community 
is achieved.
    These demands are as simple as they are just. There must be 
a verifiable stop to Serb military action against the people of 
Kosovo. Belgrade's military police and paramilitary forces must 
leave to enable refugees to return safely. An international 
military presence must be permitted. And the people of Kosovo 
must be given the democratic self-government they have long 
deserved. In addition, as President Clinton has made clear, we 
insist that the three American soldiers now in the custody of 
Belgrade be released immediately and without conditions.
    The current crisis highlights the need to integrate the 
Balkans more fully into the Euro-Atlantic community of 
democracies. We have made a start in this direction, but one 
outcome of the current fighting must be a comprehensive 
multiyear multinational approach. We do not want this conflict 
to serve as a prelude to others. In the weeks ahead we will be 
consulting with you and working with regional leaders, our 
allies, and international financial institutions to develop a 
strategy for bringing Europe's southeast corner into the 
continent's main stream.
    As we look ahead, we know that the prospects for long-term 
peace in Europe also depend on the success of democracy in the 
Baltics, Ukraine, Russia, the Caucasus and Central Asia. For 
this reason, I strongly urge your backing for the SEED and 
Freedom Support Act programs. These democracy-building 
initiatives are good investments. Already a number of countries 
have graduated and no longer need our aid, but the region is 
vast and the dangers posed by corruption, criminals, and 
communist backsliders are great. We need your help in funding 
these initiatives fully and flexibly so that the forces of 
freedom may be bolstered and their enemies held at bay.
    Our efforts to promote lasting stability across Europe are 
mirrored in our own hemisphere through the Summit of the 
Americas process. Here our challenge is to translate the 
promise of reform into the reality of prosperity that is 
broadly shared and to strengthen fragile democratic 
institutions. One major test is in Colombia where we are 
committed to helping President Pastrana reestablish the rule of 
law and secure a future of peace for his people.
    Similarly in Asia we are working with allies and partners 
to improve security and cooperation, restore economic momentum 
and build democracy. In this region there is no greater threat 
to peace and stability than the situation on the Korean 
Peninsula. With our Korean and Japanese allies and China, we 
are seeking ways to reduce tensions. To this end, we have 
vigorously pressed our concerns about North Korea's long-range 
missile program. We have reached an agreement that will allow 
U.S. inspection of suspicious underground construction at 
Kumchang-ni, and we continue to insist that North Korea meet 
its obligations under the Agreed Framework. That framework 
succeeded in freezing North Korea's plutonium production and 
separation functions at Yong Dong and bringing those facilities 
under rigorous IAEA monitoring. Pursuant to the framework, 
those facilities will eventually be dismantled and the nuclear 
fuel shipped out of North Korea as long as North Korea is 
abiding by its terms. Our support for the framework is vital, 
and I urge Members to provide that support by approving the 
President's request for $55 million for the Korean Peninsula 
Energy Development Organization.
    Meanwhile, former Secretary of Defense William Perry is 
conducting a comprehensive review of the U.S. approach to North 
Korea. He is seeking extensive input from Congress and working 
closely with our allies, and he will complete his 
recommendations later this spring.
    Also in East Asia, we have continued our strategic dialogue 
with China. Since that dialogue began, China has taken positive 
steps on proliferation, moved ahead on economic reform, and 
played a responsible role during the Asia financial crisis. We 
need to recognize this progress even as we press for more.
    During Premier Zhu Rongji's visit to Washington last week, 
President Clinton raised matters where the U.S. and China 
disagree. These include our decision this year to pursue 
vigorously a China-specific resolution at the Human Rights 
Commission. This reflected our condemnation of widespread human 
rights violations, including the arrests of Chinese who sought 
peacefully to establish an opposition political party. And 
Congresswoman Pelosi, I can assure you that the Chinese can 
testify to you that I never miss an opportunity to raise the 
subject.
    Before and during Premier Zhu's visit, significant progress 
was made towards an agreement that would allow China's 
accession to the World Trade Organization on commercially 
viable terms. Because such an agreement would clearly benefit 
U.S. interests, we will resume negotiations later this month in 
an effort to resolve the remaining issues.
    As I have said before, in our relations with China, 
engagement is not endorsement. We continue to have sharp 
differences with Beijing, but we also believe that the way to 
narrow those differences and to take advantage of the many 
areas where U.S. and Chinese interests coincide is through 
debate and dialogue.
    In the Middle East, we continue to work with regional 
leaders on behalf of peace. We are in regular contact with 
Israeli and Palestinian officials, encouraging them to carry 
out the Wye River Memorandum. We have expressed our support and 
friendship to Jordan's new King Abdullah. We consult frequently 
with the leaders of Egypt as we pursue our diplomatic efforts. 
I hope we can count on the subcommittee's backing for those 
programs that help our partners and support the peace process.
    In the Gulf we have responded to flagrant Iraqi violations 
with forceful measures to reduce the aggressive potential of 
the Baghdad regime. We continue to defend pilots patrolling the 
no-fly zones and to work with the Security Council to develop a 
basis for resuming inspection and monitoring of Iraq's 
remaining WMD capabilities.
    Our policy is to counter the threats Saddam Hussein poses 
to Iraq's neighbors, our allies, and our interests and to 
support the Iraqi people's desire to reintegrate themselves 
internationally and free themselves from a leader they do not 
want, do not deserve and never chose.
    Mr. Chairman, the new century will demand from us also a 
fresh approach to the dangers and opportunities of Africa. With 
regional leaders, we are searching today for ways to end bloody 
conflicts from the Sudan and Horn of Africa to the Congo and 
Sierra Leone. However, these immediate crises must not cause us 
to neglect long-term goals; therefore, I urge your backing for 
our efforts to assist the fragile transition to democracy in 
Nigeria, to help extend the rule of law throughout the 
continent, and to advance the essential human goal of 
sustainable development.
    Mr. Chairman, many of the measures we take to protect 
American security and prosperity are directed at particular 
countries or parts of the world. But others can best be 
considered in global terms. These include our international 
economic leadership, the war against terror, drugs and crime, 
and initiatives to promote democracy and human rights. These 
also include our strategy for safeguarding American security by 
preventing weapons of mass destruction and the missiles that 
deliver them from falling into the wrong hands.
    The economic crisis in Russia and elsewhere in the new 
independent states adds urgency to the need for effective 
action. Thousands of scientists with WMD expertise are facing 
increased temptations to sell their know-how to the highest 
bidder. This year we are requesting $250 million for State 
Department programs under the President's Expanded Threat 
Reduction Initiative. These programs seek to enhance our 
security by engaging weapons scientists to prevent 
proliferation, halt smuggling, and tighten export controls.
    Mr. Chairman and Members of the subcommittee, 50 years ago, 
only a short distance from where we are now, President Harry 
Truman delivered his first and only inaugural address. In what 
came to be known as the ``Four Points Speech,'' he challenged 
Democrats and Republicans alike to lend a hand to those 
struggling for freedom and human rights; to continue programs 
for world economic recovery; to strengthen international 
organizations; and to draw on our country's expertise to help 
people help themselves in the fight against ignorance, illness, 
and despair.
    I think that as we look at what is happening now, I believe 
that we are summoned to meet similar responsibilities in a far 
different time and to honor the principles that will endure for 
all time. To achieve that mission, I pledge my own best efforts 
and respectfully ask for your help and counsel.
    We have a lot to do together, and I am very pleased to be 
here today. Thank you, and I will now answer your questions.
    [The statement of Secretary Albright follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Callahan. Thank you, Madam Secretary. At this time we 
will recognize the Chairman of the full committee, Mr. Young of 
Florida.
    Mr. Young. Mr. Chairman, thank you very much. And Madam 
Secretary, I would like to compliment you on your source of 
energy. We see you showing up in all parts of the world, always 
looking fresh and bright and energetic; and I am wondering 
where that source of energy comes from. I think we would all 
like to know that.
    Secretary Albright. Makeup is a wonderful thing.

                     Mr. Young's Opening Statement

    Mr. Young. And I want to compliment Chairman Callahan in 
advance because he is going to have a major responsibility this 
year to get as much out of the foreign operations account as he 
can to do the things that you think and that he thinks needs to 
be done. And also Chairman Jerry Lewis, who will have the 
largest part of the supplemental as we deal with the national 
defense aspect of the Kosovo involvement.
    But also on this subcommittee--if you look closely you will 
see that there are four subcommittee chairmen as Members of 
this subcommittee, which gives it a very high priority and very 
senior members. And I think that is good because they are going 
to have a difficult time this year. And I wanted to focus on 
the issue of Kosovo if I could and how that relates to the rest 
of our responsibilities in the world.
    And most of my comments will be related to national defense 
and the Defense Department, but these days it appears that your 
department and the Defense Department are pretty much merged on 
a lot of the issues. So I don't feel out of order talking to 
you about them.
    But as we bring resources, military resources, into the 
Balkan area, we are stretching really thin, Madam Secretary; 
and I have been bringing this message to the administration and 
to my colleagues in the Congress for the 4 years that I served 
as Chairman of the defense subcommittee. But we are stretched 
very thin. And today as we increase our involvement in the 
Balkan region, we are taking resources from other areas of 
responsibility.
    For a number of years, we have talked about being able to 
deal with two MRCs, major regional conflicts, simultaneously. I 
don't think we can do that. Just recently, I have seen 
resources taken from the Korean theater, the aircraft carrier 
which has disturbed our allies in the region, the U-2 planes 
that have been taken out of the region. F-15s that have been 
dedicated to the defense of Korea and/or Japan have been 
rededicated now to the Balkan area. EA6-Bs that were very 
important in Northern Watch in Iraq have been dedicated now to 
the Balkans.
    And I am concerned that we are stretching so thin that if 
something really serious like a major regional conflict 
developed, we would be in trouble. And I worry about North 
Korea because, as you know, you and I have met with the 
leadership on many occasions and on some of those occasions we 
have talked about North Korea, the development of the No Dong 
missiles, the Taepo Dong missiles, the many underground 
facilities that the North Koreans have. South Koreans are a 
little edgy about this; our U.S. troops in the region are edgy 
about this.
    So the point that I am getting at--I am going to enlist 
your help in convincing the administration--is that when they 
send this supplemental down that we are prepared to consider as 
an emergency without offsets that it be adequate, not only to 
replace the bullets and the missiles and the spare parts, the 
equipment that we are wearing out in the Balkans, but to 
recognize that there is a serious stretching very thin of our 
overall capability and hopefully support us in our effort to 
try to get the military back to where it should be as far as 
training hours, as far as spare parts, steaming hours for 
ships, and things of this nature, things that we all know 
about.
    But the meeting we were supposed to have yesterday was 
canceled for some reason. But we need to start the process 
quickly on the dollar numbers. The number that I am reading in 
the newspapers, in my opinion, will be totally inadequate to 
carry the Balkan--even the Balkan issue from now to the end of 
the fiscal year, because none of us know how much of an 
involvement will be between now and the end of the fiscal year. 
So what I am urging is an open mind and a realization that we 
have to do more than just replace the bullets and the missiles, 
because we are wearing out troops. We are wearing out 
equipment. And I know you understand that. And I know you will 
be supportive, at least I hope that you will be. And I thank 
you for listening to me.

                                 kosovo

    Secretary Albright. Mr. Chairman, let me just say that I 
think what has been quite remarkable in this administration, 
especially as we look at Kosovo, has been the integration of 
the efforts of the military with the diplomatic efforts, and 
the very close work that I carry on with Secretary Cohen and 
Chairman Shelton and the amount of time we all spend together 
analyzing the various angles of the problem and supporting of 
each other.
    I have the highest respect for the American military. 
Without it this country would not be what it is, and I believe 
that the military needs to have what it must have in order to 
be the strongest, best military in the world. I am grateful 
every day to what our military is doing, not only in Kosovo, 
but everywhere in the world. When I travel, I make a point of 
visiting the troops.
    I have also spent a lot of time in trying to work on a 
policy where force and diplomacy work together. I think that 
one without the other is not effective. Kosovo is a very good 
example where we have tried for 10 years to solve the problem 
diplomatically and ultimately needed the threat of force and 
the use of force to support diplomacy. Now diplomacy is acting 
in support of force. So with that I went to the NATO 
ministerial meeting on Monday. It was in order to show the 
political support for the NATO alliance.
    I do believe that this is a package. Secretary Cohen and I 
are talking about mutual support for each other as we look at 
the emergency supplemental. It is a true emergency and needs to 
be dealt with in that way.
    The State Department part of it will consist of requests 
for humanitarian assistance and assistance to the frontline 
states and the Kosovars and security needs in terms of police 
training, and war crimes and our operating budget. But I am 
more involved in having discussions, not making decisions, 
about OPTEMPOs and making sure that our military has what they 
need to do the job. I agree completely that we need to support 
them, and I am counting on you and Secretary Cohen to support 
the other parts of the supplemental.
    Mr. Callahan. Mr. Obey.
    Mr. Obey. Thank you, Mr. Chairman. Madam Secretary, good to 
have you with us. I don't intend to ask a question, I would 
just like to ramble a little bit and lay out a couple of my 
observations and concerns.

                            kosovo situation

    As you know, I did not support the original resolution 
endorsing the placement of U.S. peacekeepers pursuant to 
Rambouillet. I did that for a couple of reasons. First of all, 
as you know, I had a couple of concerns about the agreement 
that was reached there. More importantly, I did not believe it 
was any business of the Congress to decide where peacekeepers 
should be placed because I feel that the placement of 
peacekeepers falls within the President's commander in chief 
prerogatives. And I also felt that the Congress' vote was 
coming too early because we did not yet know what the final 
conclusion was going to be to that conference, and I don't 
believe in giving any administration a blank check.
    Having said that, as I made quite clear, I fully support 
what NATO is doing at the moment. I think we had no historical 
choice. I said in the speech on the floor when we were debating 
the issue that if we had a vote on the floor to deal militarily 
with the situation, I would vote yes.
    But I am concerned about some of the second-guessing that 
is going on. And I would like to walk through some of that. We 
now have, for instance, a lot of people in the Congress 
insisting that we move in with ground troops. I would point out 
that the vote in the Senate, which was only an authorization 
for an air war, was a fairly narrow vote. And I doubt at the 
time that if the Senate had voted on ground troops that they 
would have voted yes. I think the Congress needs to be a little 
skeptical about its own advice these days.
    Secondly, sometimes when you are operating with an 
alliance, you don't have the luxury of doing everything you 
would do if you were operating alone. President Bush found that 
out the hard way when he was criticized for supposedly stopping 
one or two days early in Iraq and not going into Baghdad and 
cleaning out Saddam then. In my view, President Bush had no 
choice but to do what he did because the alliance that we had 
had never agreed to move on to Baghdad. And so to keep the 
alliance together, he chose an imperfect solution. I think he 
had no choice at the time. And I think the administration has 
had the same situation with respect to the cries for ground 
action in Kosovo at this moment.
    I think it has been amazing how far you have brought the 
NATO alliance. But if General Clark had asked for ground troops 
in the beginning, I don't believe he would have even gotten 
NATO's permission to proceed with an air war. And I think it is 
important to understand what this history has been.
    On June 25 of '91, Croatia and Slovenia declared their 
independence. In June 26 of '91, Serb forces moved into Croatia 
in areas with large Serb populations. In October of '91, 
Albania occupied Kosovo. On December 15 of '91, Germany warned 
that they might recognize Croatia and Slovenia before 
Christmas. At that time President Bush cautioned them; in my 
view, correctly so. The next day, Germany did recognize 
Croatia. I went to Germany the following April. My son was a 
student at the University in Germany, and I gave a speech 
there. I noted what the Germans had done in recognizing 
Croatia, and I indicated that I felt that having done that, 
they had incurred certain responsibilities. And one of the 
responsibilities was to face the fact that Milosevic's 
continued reaction to the destruction of Yugoslavia and the 
western recognition of some of those countries would inevitably 
lead to the need for them to use military action. That speech 
was not well received, to say the least. They thought I was 
nuts. But the fact is that today what I said, has largely been 
borne out.
    But now we are hearing a lot of second guessing. I want to 
stipulate publicly that when I was in briefings with the 
administration, with the military, with the CIA, with you, with 
the Secretary of Defense, and with the President, we were told 
up front by the President, nose to nose, that the Congress 
needed to understand that this air war might not go very well, 
especially at first. And we were told specifically that it 
might very well not succeed in preventing Milosevic's driving 
out the Kosovars, but that it would at least degrade his 
military capability and begin to create the conditions that we 
would hope would eventually lead him back to the bargaining 
table. So I don't feel that what has happened so far is any 
surprise, given what we were told about ahead of time by the 
President.
    But I believe certain things need to happen. I do believe 
that the President needs to go on television and explain to the 
country why he is asking for the supplemental. I think when he 
does that, he needs to make quite clear what Mr. Milosevic was 
planning in Operation Horse Shoe. My constituents don't know 
that he was planning to wipe out a village a day because he 
felt if he didn't do any more than that, the West would not 
react. And when my constituents are told that, they immediately 
understand that the carnage that is occurring in Kosovo is not 
because of NATO; it is because of Milosevic and his thuggery, 
and I think the President needs to go on television and explain 
that.
    I think the President also needs to continue to insist that 
these funds not be offset. If we had run World War II by having 
the accountants govern rather than the military strategists and 
the political leadership, we wouldn't be worrying about having 
to take on Mr. Milosevic in Kosovo today because Nazi flags 
would still be flying in Belgrade and in Kosovo. We fought the 
war first, and we did the accounting afterwards.
    It seems to me that this is clearly an emergency and so is 
Central America. After all, we are being asked to take about 
20,000 refugees from Kosovo. We have 1,000,000 refugees coming 
out of Latin America if this is not handled right. That is a 
far greater direct impact on our own society than the war in 
Kosovo will be.
    The other thing I want to say is that when people are 
urging that the Russians be involved--and I think they need to 
be involved--I think it is going to be immeasurably more 
difficult to get them involved when they see, for instance, 
that the Congress has taken $300 million off the table in the 
bill that the House passed a month ago, taken $300 million off 
the table to finance an agreement we are trying to get started 
with the Russians on converting weapons-grade plutonium. It 
just seems to me that that, indeed, is a strange way to build 
confidence with the Russians that they can deal with us on 
issues.
    So I would hope that the White House would be firm in its 
insistence that accountants not rule the game. And I also would 
make one other observation. I think it is to the credit of the 
American people and to our press that they are concerned about 
casualties on the other side. I think that says something good 
about human beings in our public and in the press. But at the 
same time, I think the press has to be careful in its coverage 
of the mistakes that are made by NATO to not wind up creating 
the impression that somehow because mistakes are made by pilots 
that therefore we should be pulling our punches in what we are 
doing in Kosovo. I just have to say that if NATO pilots were 
consistently as accurate as the press is, that on occasion NATO 
bombs would be falling on Iowa.
    So I would simply urge people to recognize it is a hell of 
a lot easier to second guess when you are sitting behind a 
committee table or behind a TV camera than it is when you are 
in the cockpit or when you are in NATO headquarters or when you 
are trying to deal with this situation from the front lines. To 
me, this is the time when we have got to come together, and we 
need to do it fast. And while no one is going to agree fully 
with what any administration does on any of these subjects, I 
think that you are doing the very best you can under difficult 
circumstances, and we need to stand with you.

                                  nato

    Secretary Albright. Thank you very much, Mr. Obey. I 
appreciate very much your going through the history of this and 
the attempts that we have made.
    I am very proud of what this administration is doing 
because I think we are standing up for American values, the 
necessity of dealing when there is a barbaric attempt to 
cleanse ethnically a whole group of people and when we see the 
plight of the refugees. I appreciate very much your making that 
clear. The President is giving a speech today on the West Coast 
in San Francisco, and I think he is going to express again the 
sense of determination that we and NATO have to carry this out. 
I have said this before that I would much prefer to be 
questioned by the press or questioned by all of you about what 
we are doing than to be sitting here and have all of you say 
why aren't you doing this? Why are you standing by while this 
great horror is being carried out?
    Mr. Obey. I do want to add one thing because I don't want 
to leave any confusion. I do not object to the administration's 
preparing for the eventuality of having to use ground troops. 
In fact, I favor that. I recognize how difficult that is, given 
the concerns of some of our other NATO allies. But I think 
without busting up the alliance, we need to do as much as we 
possibly can to prepare the infrastructure for the use--for the 
possible use of ground troops if Milosevic does not respond to 
the air campaign, because I am highly concerned that when this 
is all over and we finally do get into Kosovo, we are going to 
find large numbers of people no longer with us. And I don't 
think we will feel very comfortable if we haven't done 
everything possible to avoid that catastrophe.

                      opposition to ground troops

    Mr. Callahan. Echoing some of the discussion on ground 
troops, Mrs. Albright--I have expressed this to you and to the 
President--I don't care what the polls say, I am opposed to 
American ground troops in Kosovo under any circumstances, 
whether they be peacekeeping or other types of ground troops. 
We are participating and cooperating with the alliance. Our 
proportional financial contribution, including our Navy and Air 
Force, are far more of a contribution than any other country is 
making. But I am not elected to make military decisions. The 
President and his military people make those decisions. I am 
elected by the people of my district in Alabama to represent 
them in the Congress of the United States.
    I did not poll the people of Alabama. My personal view is 
that American ground troops in Kosovo are wrong and unnecessary 
and that anything we can do to preclude the use of American 
forces on the ground in any part of this endeavor. I am going 
to be opposed to the introduction of our troops in the region. 
Mr. Lewis. Chairman Lewis?

                            funding concerns

    Mr. Lewis. Mr. Chairman, let me express my appreciation to 
you, to Ms. Pelosi, and to the rest of my colleagues for 
allowing me to be present, in part, wearing the hat that 
relates to my other work in the appropriations process. Madam 
Secretary, you may not be aware that our Ranking Member, Mr. 
Obey, and I spent over a decade together on this subcommittee 
in the past; and I must say I applaud his statement today. 
Rambling, he suggested, but very cogent in terms of the 
problems and priorities that are a part of our current crisis.
    In that earlier decade, he and I didn't always agree. We 
argued a bit about Central America and El Salvador, et cetera, 
but at the end of the game we have had a different kind of 
success in Latin America than we are experiencing currently in 
the Balkans. And so, today, Madam Secretary, I come back as a 
Member of this subcommittee for no light reason in this very 
challenging time. I want to join my colleagues in welcoming you 
here today and express my appreciation to your very committed, 
not just energetic, but capable efforts in connection with our 
challenges, particularly in Europe.
    It is a privilege to serve on this subcommittee. But the 
challenges of wearing that hat as the chairman of the defense 
subcommittee are entirely another thing. As a consequence, in 
our current activities in Kosovo the whole difficulty of 
solving the immediate problem and finding our way out weighs 
very, very heavily upon this member.
    I know that today's session will largely focus upon 
questions about Kosovo, for it is a necessity in this 
subcommittee. But as we do that, I must tell you that I am 
looking at this situation from another perspective. It is 
extremely important that America not lose its broader focus. We 
have been involved in a number of missions that were planned; 
some were not planned. Several were unforeseen, clearly several 
unbudgeted. And I would ask the committee just to focus for a 
moment on some of that.
    There have been missions that to many have been 
questionable from a national security perspective and missions 
whose demands in terms of people, equipment, and money have 
been both substantial and debilitating to our overall military 
preparedness. The military deployment to Bosnia has already 
cost us over $9 billion, a figure that will grow to perhaps 
maybe even more than $11 billion by the end of fiscal year 
2000.
    Operations against and around Iraq have cost about $7 
billion, as we can measure it this moment. I am concerned that 
as we are addressing Kosovo we are moving forces away from the 
region around Iraq, and that in itself creates a number of 
questions that are extremely problematical. Haiti and Rwanda 
and other contingencies have cost us over a billion dollars. 
Easily one can total in this variety of missions some $20 
billion, largely unbudgeted, which puts great pressure on our 
military processes.
    We have, as you know, for some time been steadily reducing 
the gross dollar amount allocated to our defense systems; and 
yet you have clearly understood that there is a direct linkage 
between our ability to carry forward our responsibilities as 
the leader in the free world and our need for military strength 
as we are now engaged in combat with Serbia. Madam Secretary, 
as I said earlier, I am sure we will dwell on that problem 
largely today. That is more than understandable under these 
circumstances. But I raise these other points to remind you and 
others that Kosovo is not only a national security problem. We 
obviously can confirm today that it expands well beyond just 
the Balkans. Iraq, North Korea, China, India, Pakistan, Iran, 
and, of course, I certainly hope no one on this subcommittee is 
forgetting Russia.
    All of these are potential flash points, all posing serious 
problems that engage our Nation's core national security 
interests. I must ask how and whether we can rely upon our 
military strength for possible contingencies in these areas at 
the same time we have, in all likelihood, committed ourselves 
to long and costly commitments in the Balkans, even if the 
fighting were to end today.
    When I ponder these questions based on where we are today, 
Madam Secretary, I confess that I am not optimistic. The issue 
is simple. Are we willing to commit resources needed to protect 
our vital interests in many of these hard target areas first, 
as we discuss Kosovo?
    I would ask you to help me with two fundamentals. The first 
is I believe the American people continue to need a clear and 
understandable statement by the President as to what our 
humanitarian, as well as strategic interests, are in Kosovo and 
a plan connected with that objective as well as our end game. 
How do we get out of this at the other end? That is largely a 
defense question, Madam Secretary; but we are in this because 
of our defense responsibilities.
    But the second question involves one that very much falls 
in the lap of this subcommittee specifically. As we get to 
whatever endgame there is, on all of our minds is the plight of 
these refugees who, in excess of a million, are in the minds of 
the American public as well. I ask you, if we are successful as 
a part of our plan in returning these refugees to their home 
communities, who is going to pay the costs of rebuilding 
Kosovo? The term NATO is very interesting and very important, 
but the burden usually falls very significantly upon the United 
States.
    So who is going to bear these costs of the reconstruction 
of Kosovo? Clearly, that is a foreign operations or a foreign 
affairs question. Clearly, it is not a national defense 
question. So, Madam Secretary, as I appreciate the opportunity 
to ponder with you these very grave difficulties, clearly the 
problem is not going to end with just the war itself. It goes 
well beyond and involves your leadership specifically. I 
appreciate your being with us.
    Secretary Albright. Thank you very much, Mr. Chairman. Let 
me say that, as I said to Chairman Young, I believe very 
strongly that our military needs to have the assets to carry 
out its responsibilities, and that we cannot let down our guard 
in any other part of the world while we deal with the Kosovo 
issue. And I can assure you that we also spend a great deal of 
time thinking and talking about Korea, Iraq, and the other 
flash points. It is very much on our mind that we cannot focus 
on one thing to the avoidance of dealing with the issues there.
    But let me just say--and you might expect that I am not 
here to discuss the Defense budget--but I would like to say the 
following: that the partnership between the Defense Department 
and the State Department is what is essential in carrying out 
our national security policy. We would also prefer to solve our 
problems diplomatically. One can try as much charm as possible, 
but ultimately it takes money. If you look at our budget as you 
are quoting those figures, do you know that our entire budget 
for the State Department is $21 billion? What I am coming here 
to ask for is $14 billion for all the work that we do in 
foreign operations, which has to do with a number of other 
issues that are in my long written testimony and some that I 
mentioned here that involve fighting the war on drugs or 
dealing with terrorism or dealing with human rights problems or 
assistance programs to countries that we are trying to make 
sure do not tip over into chaos and confusion and create 
instability for us.
    It is a paltry amount, frankly, in comparison. It is 1 
percent of Federal spending. And I think that most Americans 
are surprised, because as foreign policy is described and our 
foreign aid programs are described, you would think it was a 
quarter of the budget, and it is not. I believe that the best 
way to protect our military and work with it is for us to have 
an effective diplomacy and to work hand in glove together on 
it.
    I would hope--and I am planning to speak out loudly on 
behalf of the Defense budget because I believe in it--that we 
also need those who speak on behalf of the Defense budget to 
speak for the foreign policy part of the budget, the diplomacy 
of the State Department. We can't have a hollow diplomacy. We 
cannot have buildings that are not secure, and we can't have 
buildings that are secure where nobody has anything to do in 
them because we don't have any money.
    As Mr. Obey said, you know, we can't do this by having 
accountants worry about how we take care of our policy. We need 
to have a robust policy. I have been saying that what is 
happening on the offsets now is that we are not only robbing 
Peter to pay Paul; we are robbing Paul.
    We are robbing Peter to pay Paul. There is no money there. 
You cannot keep moving money around.

                                 kosovo

    Now, on the issues that you asked about, the President and 
I and his other advisors have said that our interests in Kosovo 
are very broad and deep in terms of America's interests. First 
of all, Americans, as we have seen, and the American public 
supports what we are doing, are appalled at the kinds of 
humanitarian tragedies. America cannot stand by while people 
are slaughtered and raped and ethnically cleansed and watch as 
that is taking place and creating a great sense of instability.
    I happen to believe that the Balkan peninsula is very 
important to European stability and security. European 
stability and security is important to the United States. 
Making sure that ultimately that peninsula is integrated into a 
Europe where there is democracy and prosperity is important to 
the United States.
    Finally, we have done a lot of talking about NATO. NATO is 
the prime military alliance of our time. This is the first war 
that it has really fought. The unity of NATO is remarkable, and 
America's leadership in it is something essential to the 
national interest. Those are the broad interests that we have, 
and I believe that, as the President is going to say a little 
later today, we must prevail. It is essential that we prevail 
for our national interests.
    Now, the end game is that, as we have made clear, the air 
campaign is going to continue. Milosevic has the choice of 
saying that there will be an agreement, and that the Kosavars 
will be able to go home and will be able to have a self 
government and will be able to function within the Balkan 
peninsula. And as the President is going to say, we are 
prepared to inflict such damage to Milosevic's military that he 
either accepts the outcome that we seek, or the balance of 
power in Kosovo will shift against him at a time when his 
actions, far from destroying his opposition, are galvanizing 
its strength and determination. Ultimately he can choose to cut 
his mounting losses or lose his ability to maintain his grip on 
Kosovo. It may not come out with those words, but I think that 
the point here is that we are determined to prevail.
    Also let me say, and I can provide you with more detailed 
information because I know that Chairman Callahan is 
interested, that the Europeans are carrying their fair share. 
They are carrying it by the contributions and the numbers of 
planes and the sorties. I will let Secretary Cohen talk more 
about that at some point. They are also sharing in terms of the 
amount of money they have put aside for economic and 
humanitarian assistance to Kosovo as well as to the neighboring 
front line states. They have agreed to take the leadership role 
in coordinating the international reconstruction assistance and 
in managing that. Obviously we are going to have to take a role 
in that. But I think that more than I have ever seen the 
Europeans understand their prime responsibility for that. Our 
role in reconstruction is to leverage the money that we have 
with additional funds from them and to lead. Believe me I spend 
a great deal of time on the phone with my fellow foreign 
ministers. The American role in keeping unity and determination 
is essential, and I think that it is a role that we should be 
proud to have.
    Mr. Lewis. Thank you, Madam Secretary. I appreciate the 
Chairman's patience with my concern here. I am almost 
desperately reminded of a former Secretary of Defense by the 
name of McNamara in the Vietnam age and the word 
``gradualism''. Madam Secretary, the refugees are at the other 
end of that. That will be the committee's responsibility. But 
between now and then there is almost an incredible job to make 
sure that the American public understands that they are in that 
for the long haul if we are going to go down that road. 
Gradualism had a different effect at a different time in our 
recent history. It could be disastrous for America's leadership 
unless a very solid foundation that involves the permanency of 
American public support has been well established by the 
President. Otherwise will be known as Clinton's war. At the 
other end, though, there is probably what used to be the 
Marshall Plan, potentially the Albright Plan, that involves all 
of the Balkans as a piece of the other end of this. Thank you.
    Secretary Albright. Thank you.

                            funding concerns

    Mr. Callahan. Madam Secretary, I want to recognize the 
chairman of the full committee. But let me just make an 
observation about some of the discussion that just took place. 
The responsibility of this committee is to fund the foreign 
operations of your State Department. That is our primary 
function. But seemingly here lately we are beginning to be more 
involved in the discussion of military activities. It appears 
if we continue the type of activity we are engaged in today 
before long we are going to have the Secretary of Defense sit 
next to you in order to have a hearing on foreign policy. That 
somewhat disturbs me. I don't know why, that just disturbs me.
    Our role on this committee is to give you an adequate 
amount of money to have an effective foreign policy. You 
mentioned that we are only talking about $21 billion. I would 
remind you, and we discussed it earlier, that today is April 
15. Americans in my district and in every Congressional 
district in our country are filing their taxes tonight. If you 
divide it by 435, each Congressional district will contribute 
about a billion dollars to the United States Treasury. So when 
we are talking in terms of only $21 billion or talking in terms 
of only a billion dollars, we are talking about all of the 
income taxes that are paid in any single Congressional 
district. So sometimes I think we lose sight of how much money 
we are talking about when we talk about billions of dollars.
    I would think today especially, when the people in my 
district in Alabama recognize that when they send me a billion 
dollars, I am going to spend it all in one day? I am going to 
spend it all in just a matter of seconds here trying to help 
people? It is not a question of whether or not they support our 
efforts with respect to the humanitarian aspects of this 
problem, but a question of real money coming into the Treasury 
for our appropriations.
    So I am concerned about the apparent closeness of the 
Defense Department and the State Department. There are some in 
Alabama who ask me is it Mrs. Albright or is it the Defense 
Department, does she utilize the Defense Department to effect 
her diplomacy. That is a question that comes up. It may not be 
true, it may not be accurate. It may be unfair. But these 
questions come up and they ask if we going into a diplomatic 
room to negotiate changes that will make life better for all 
the world, and at the same time saying that if you don't do 
what we want, we are going to bomb you? That is a very serious 
perception that is beginning to take place. I doubt seriously 
that is the fact, but nevertheless it is a perception that we 
must be concerned with.

                               diplomacy

    Secretary Albright. May I comment, Mr. Chairman. First of 
all, the point that I was making is that our budget is 1 
percent of all federal spending. You were kind enough to invite 
me to Mobile. I had a wonderful time addressing a very large 
audience. At that stage the Asian financial crisis was hot and 
heavy. Your constituents asked me about the effects of the 
Asian financial crisis on your port. We talked about the 
importance of solving it because some of your industries were 
hurting as a result of the Asian financial crisis. I believe 
that the American public really does understand that there is 
no border now between domestic and foreign policy issues, and 
that there is nothing foreign about foreign policy. We are 
today focusing on the use of force in an area where we tried 
diplomacy for 10 years. It didn't work because, as ``The 
Washington Post'' has said, the Serb offensive was meticulously 
planned. When you are dealing with someone who has decided to 
eliminate a population or reengineer an entire province, there 
is a certain stage at which diplomacy will not work.
    Diplomacy does work without force, however, as we have 
dealt with the trade crisis, in Thailand, Indonesia, South 
Korea. We are looking at what we are doing in Central America 
to develop a region of partnership with our hemisphere that is 
stronger than ever before. We are trying to encourage democracy 
and trade in Africa. This, diplomacy is an essential part of 
how the United States works.
    As I have said, there are times that diplomacy needs the 
backing of force and force needs the backing of diplomacy. But 
for the most part, diplomacy works on its own. The purpose of 
foreign policy is to influence other countries to understand 
U.S. national interests, and we do that with a minimal amount 
of money and normally without the use of force.
    I think that your constituents and everybody's constituents 
here understand that there is no border between domestic and 
foreign policy. What they don't understand is that it is only 1 
percent of our budget that goes for that kind of active 
diplomacy.

                       importance of foreign aid

    Mr. Callahan. I might comment because of your visit to 
Mobile you have certainly educated the people of my district 
about the importance, not only economic importance, but the 
overall importance of a well-financed foreign policy. That is 
not a question anymore because of the fact that you did explain 
it to them. I think that you recognize that you are well 
revered in my district. I am happy that you are not eligible to 
run for the presidency, because you do have a great deal of 
admiration and popularity in my district.
    But regardless of your popularity or mine, we have a 
responsibility. That responsibility is--my role in government 
is appropriating money. That is my role. I think that I do have 
the responsibility and the right to question any agency of 
government and to try to help them understand that while the 
people do want and do understand the importance of an effective 
foreign policy, at the same time they are filing their taxes 
today and they wonder where all of that money is going to or 
will more money be needed in the future.
    Secretary Albright. I have no better partner than you, Mr. 
Chairman, in doing that work.

                           budget resolution

    Mr. Young. Madam Secretary, yesterday the House passed the 
conference report on the budget resolution. I know some that 
support that resolution and some that don't and some that are 
sort of mixed on it. Because that happened we can now proceed 
with the assignment of the 302(b) allocations, and I am going 
to have to excuse myself because that process I am beginning 
that morning. But as I go to do that, and I know all of the 
members of the subcommittee are anxious to see what the 302(b) 
allocations are going to be, it is not going to be easy because 
as we look at the 1997 budget caps, I think everybody--all of 
the subcommittees are looking for the opportunity to meet more 
responsibilities than those budget capss provide for. However, 
as I go to do that, I just wanted to leave one other thought 
along the lines of my first comments to you.
    For the last 14 years we have been reducing our investment 
in our national defense. Desert Storm, we had 18 Army 
divisions, today we have 10. The number of fighter wings in the 
Air Force are down substantially since Desert Storm. We have 
been, as Mr. Lewis pointed out, to so many deployments. I hope 
that you will pass on to the President, and I hope that you 
will agree, I have passed it on to him and I am not sure if he 
agrees or not, but Madam Secretary, you can't fight wars out of 
a petty cash fund. If you are going to fight wars, if you are 
going to commit troops, you have got to be prepared to pay for 
them. Congress has not been involved in any of the decisions to 
fight these wars, but we always get the bill at the end. So 
understand that as we deal with that supplemental, it has got 
to be realistic. We have got to get real and make up for a lot 
of lost time in our national defense at the same time we pay to 
replace the bullets and the missiles and the spare parts and 
things like that.
    I appreciate you being here, and I apologize for having to 
leave but the 302(b) bill allocations are essential if we are 
going to keep on schedule for our appropriations bills. Thank 
you.
    Secretary Albright. Let me just say that our feelings about 
the budget resolution are not mixed.
    Mr. Young. I understand that.
    Secretary Albright. Thank you very much.
    Mr. Callahan. Thank you.
    Ms. Pelosi. Thank you very much, Mr. Chairman. I am very 
sorry our distinguished chairman is leaving. We have been 
blessed on the Appropriations Committee with always having a 
very distinguished chairman and I know that Mr. Young will look 
out for the interests of our subcommittee in the 302(b) 
allocations.
    Like the defense budget where the spending has been 
reduced, so too with the foreign operations budget. We are 25 
percent lower than we were probably 10 years ago. Obviously, 
foreign aid is a good investment. If we do more diplomatically, 
we would have to do less militarily, and I think that is what 
the American people would like to see us do.
    I appreciated your expression about the budget in your 
remarks and your response to our distinguished chairman, Mr. 
Young. I am concerned about, for example, initiatives that we 
want to take in Africa in development and in child survival, 
again our chairman is the leader there. Loan forgiveness is not 
one of his areas of interest, but it is one of mine. I regret 
that we missed an opportunity to stop genocide in Rwanda.
    Specifically, I want to comment on the issue of AIDS, which 
is one that I have been particularly interested in. When we are 
talking about development in Africa, we have to recognize the 
impact of the AIDS epidemic there. I would hope that you use 
your good offices to place AIDS on the G-7 agenda in a very 
strong and positive way, because only then, I think, will there 
be the recognition of the impact of AIDS, not only on the 
people of Africa personally, but on their economies as well.
    Moving on from there, as I mentioned on the question of 
China, I commend the Administration for moving on the 
resolution at the U.N. There is real need for that. Freedom 
House just put out its April report saying that since mid-1998 
China has intensified its already harsh persecution of Roman 
Catholics and Protestants who insist in worshipping outside 
government control. Religious leaders are more likely to be 
jailed. Bishop James Su Zhimin and his auxiliary bishop, Ahn 
Shushin, from Hebei Province have disappeared after their 
arrest in 1996 for carrying out an unauthorized Marian devotion 
and are assumed to be in detention. The list goes on and on. 
And, as I mentioned earlier Bao Tong, I would hope that the 
President or you, Madam Secretary, would have brought the issue 
of Bao Tong and Xu Wenli up with Zhu Ronji. Perhaps you could 
respond in your answer.
    My question is, in light of all that is going on in China 
and the continued repression following the President's visit, 
what is it that the administration has planned in order to be 
successful at Geneva with the U.N. resolution?
    Secretary Albright. Thank you very much. Let me say that 
you were very kind to comment about the State Department 
report. I think that is telling it like it is--something that I 
am very proud of. I made the point not too diplomatically at 
the Chinese reception honoring the 20th anniversary of our 
normalization. I made the points very clearly when I was in 
China, and I made the points very clearly here in my visit with 
Premier Zhu Rongji as well as Foreign Minister Tang as well as 
the President. We have consistently raised the points very 
strongly, I can assure you.
    On the question of what we are doing in Geneva. There is no 
question, Congressman Pelosi, that this is an uphill battle. 
The Chinese have been lobbying very strongly with a number of 
countries and Europeans generally. There was a sense that there 
were those who wanted to have a noncountry specific approach to 
China. We have insisted that there be a China specific 
resolution. And we have one more week before it comes up for a 
vote in Geneva. At this time no other country has agreed to 
cosponsor the resolution, which I think is depressing to say 
the least. What is going to happen is the Chinese will 
introduce a no action motion, and we are now lobbying very 
heavily to have countries vote against that.
    I have spent an inordinate amount of time with my foreign 
minister colleagues over Kosovo, but every single time that I 
have that discussion, I also point out the importance of 
support on the China, first on the no action and then on the 
resolution itself. We have sent out worldwide cables. All of 
our ambassadors are making demarches on that subject, and we 
are pulling out every stop. But I think in all honesty that it 
is not easy. We will continue to pursue the resolution because 
it is the right thing to do. I can assure you that I have put a 
major effort into that.
    Ms. Pelosi. Madam Secretary, I just hope that it is not too 
little too late in that regard. Anyway, I know that many of us 
on that committee would be very eager to be helpful to you in 
any way that we can in talking to some of the other countries. 
The Chinese have mixed economics and politics very well on the 
Commission while they admonish others not to do that.
    The other point I want to make is that it seems so ironic 
that at the time when we are coming to defend the credibility 
of NATO by putting our young people in harm's way that we can't 
get a second to a motion from our European allies when we are 
talking about human rights elsewhere.
    On the subject of Kosovo, moving on to that briefly, you 
have made an excellent presentation. As I listen to the 
exchanges here, I am reminded that Napoleon said that one bad 
general is better than two good generals. In this particular 
case it seems we have, again, 535 generals who know what we 
should be doing there. I have never seen a situation where the 
Congress is acting as if we know more about the military 
situation there than the President would, with the benefit of 
the Joint Chiefs and other resources available to him.
    Could you for the record tell us what you have alluded to 
regarding Milosevic's plan for ethnic cleansing, whether or not 
the bombing had taken place, and I might add for my colleagues, 
the identity cleansing of the Kosovars by stripping them of 
their passports, birth certificates, and burning any place that 
would have records of their identity. If you would, Madam 
Secretary, for the record tell us about that.
    Secretary Albright. Let me summarize it. I actually think 
that it would be useful for the record if that article were 
included.
    Ms. Pelosi. Last Sunday's.
    Secretary Albright. Last Sunday's, which I think details in 
a way that I can't do now all of the aspects of it. Let me just 
say the following thing. If you look at the history of 
Milosevic's reign, what we find is that he used the nationalist 
card to gain power. It began with Kosovo when he made very 
clear in 1989 that he would remove its autonomy. Kosovo is an 
area that is an historically important area to the Serbs. 
Nobody denies that. But it doesn't mean that the majority 
ethnic Albanians and other minorities cannot live there. 
Milosevic has had this policy for a long time. What has 
happened is that in the last two years he has supervised the 
dismemberment of his country because he had lost Slovenia, 
Croatia, Bosnia, Macedonia. He has now returned to turn his 
attention to Kosovo.
    This article is largely consistent with our data. It is a 
subject that I talk about with my colleague foreign ministers. 
What Milosevic had planned to do is reengineer the population 
of Kosovo to get rid of the Albanians. The Serbs won't even 
agree to the number of Albanians that are there. They planned 
to replace them with Serbs from other areas where they had been 
pushed out as a result of changes within Yugoslavia. Milosevic 
began to mass his forces, despite the fact that, as you know, 
in October there was an agreement made with him that he would 
reduce the number of his military, paramilitary, and the 
special police, the MUP, and withdraw them. He did not do that. 
He then systematically went and burned the houses of Albanians. 
If you fly over the area, you can see where the Serv forces 
systemically go after houses where there are Albanians living. 
They have pulled people out. They have sent military age men to 
what the KLA have described to me as concentration camps. They 
have put old women and children on the road. They have 
separated families. They have raped. They have used every form 
of degradation to destroy a people.
    There are those who have asked why are we doing that? Well, 
we tried because we knew that he had this plan, that he had 
30,000 troops massed on the border, with 300 tanks ready to go. 
We tried very hard not to have that happen. It is almost as if 
there had been a tape running of what was going on in Kosovo. 
What Milosevic did was once the bombing started was to put it 
into fast forward and put all of the plans that he had into 
place together as rapidly as possible.
    As you pointed out, he has taken away the identity cards 
and identification of the people so that as people are allowed 
to come back in, he determines who is who. These people have 
lost their homes and identity.
    Ms. Pelosi. Thank you, Madam Secretary. As our colleague, 
Mr. Obey, said, it is important for the American people to know 
his intentions. I thank you, Mr. Chairman. Thank you again for 
your courageous work.
    Mr. Callahan. Chairman Porter.
    Mr. Porter. Thank you, Mr. Chairman. Madam Secretary, I can 
imagine that you are sitting there saying why couldn't I have 
been Secretary of State during the Cold War, when things were 
simple and direct. I think we need to remind ourselves that we 
are engaged in two wars, at the same time. This morning, you 
have already received a lot of questions on Kosovo. I want to 
make a statement regarding that. First, however, I want to ask 
a question about the other war.
    In Kosovo, I think the American people have to put this 
whole thing in historical prospective. For the first time in 
human history, the world's strongest nation is not using its 
power to gain or to conquer for its own self-aggrandizement. We 
are using that power to protect the world from ethnic cleansing 
and genocide and to extend freedom and self-determination on an 
oppressed people. That is the first time that that has ever 
happened. I think that the American people can be terribly 
proud for the values we are expressing to the world and the 
leadership we are providing.
    Because you and I share the same commitment on human rights 
and democracy and the rule of law, you may think that I would 
be sitting here pounding on the table and saying that we have 
got to send ground troops into Kosovo right now. Clearly, I 
believe that the President should not have said at the very 
beginning that we are not going to do that. I think that was a 
gratuitous, colossal mistake on the President's part. He should 
never have taken that option off the table at the beginning of 
these hostilities because it leaves Slobodan Milosevic with the 
option of trying to simply wait out our air strikes.
    I think the President should begin the process of reversing 
that position. He should be working quietly with all of our 
NATO allies to bring them together in a united front. To have 
complete participation from every NATO nation, even the newest 
ones, if ground troops are to be used eventually in Kosovo.
    I personally think we ought to continue the air campaign 
and destroy every bit of Milosevic's infrastructure that we 
possibly can in an effort to bring the removal of his troops 
from Kosovo. I think this is the option that we should be 
pursuing very strongly at this point in time. If that is not 
going to work, I would then, if I were the President, announce 
together with my NATO allies that we will in fact use ground 
troops and begin mobilization in the hopes that that would 
bring him to his senses.
    I think that the worst thing that could possibly happen to 
the United States and to our values and to our policies in 
Kosovo is that we undertake too little and fail. If we send in 
ground troops too early and have a lot of casualties, I think 
the American people might move back from that commitment. We 
must proceed very carefully. But I think the worst thing that 
could ever happen is that we end up giving in to a man like 
Miloservic, an ethnic cleanser, a dictator, and an instigator 
of genocide. In the end, we must have victory in Kosovo.
    I want to talk though and I want to ask a question about 
the other war that is going on, the one in Iraq. Madam 
Secretary, we have lost our allies in the U.N. to a position of 
bringing this Iraqi dictator to heel. We have no surveillance 
or inspections going on of his building weapons of mass 
destruction. We seem to have no policy at all except to destroy 
his air defenses and we seem to be totally preoccupied in 
Kosovo while Saddam Hussein is left with virtually free rein to 
rebuild what has given him power in the past.
    I think an argument, a very good argument could be made 
that the greater threat to U.S. and regional security is Iraq 
and that we have no direction in this area. And I would ask you 
specifically, Madam Secretary, what are we doing in this area 
other than to provide air cover in the north and south and 
destroy some of his air defenses? Is Saddam Hussein taking 
advantage of this time when we are preoccupied in Kosovo? What 
is our policy there? What are we going to do to change that 
situation which could ultimately provide a far greater threat 
to the region than the one we face in Kosovo?
    Secretary Albright. Thank you, Congressman Porter. You are 
right. The Cold War was very dangerous but certainly simpler. 
You were mentioning Iraq and we could mention other areas that 
are of concern to us. This means that we have to be able to 
think about all of these areas at the same time and not deal 
with one to the exclusion of the other. I can assure you that 
that is not happening.
    If I could just say one thing about the ground troops and 
then answer you on Iraq. I think that NATO's military 
commanders have not recommended the introduction of ground 
troops in Kosovo. We are in the third week of an intensive air 
campaign, and we have complete confidence that it will work. 
What I found again at NATO on Monday is the determination by 
all 19 allies now to have a sustained and intensive air 
campaign. I do think it is important for people to know that 
NATO has done detailed planning for ground troops as part of an 
international security presence if an agreement is reached. 
Last fall NATO completed an assessment of options to introduce 
ground troops in a nonpermissive environment. Both of these 
plans could be updated very quickly if it were necessary to do 
so.
    On Iraq, let me say the no fly zones are being patrolled 
and action is taking place. What is interesting in terms of 
what you were saying about losing our allies is that the 
sanctions do remain in place. And the Security Council is 
considering this week the reports of a series of committees 
that were set up by the Security Council to assess how the 
monitoring of weapons of mass destruction can take place and 
their recommendations for intrusive monitoring as well as how 
to deal with the humanitarian situation. I have been very 
encouraged by the reports of what is known as this Amarand law, 
named after the Brazilian ambassador, that these reports are 
now being considered by the Security Council. We also have said 
that we would be prepared to use force if Saddam Hussein 
reconstitutes his weapons of mass destruction because we do 
agree that he is a threat to the region. That is why we 
undertook the activities that we did, as his threat is 
destabilizing to American interests there, and that is why we 
have the policy that we have. What is happening also is we are 
very concerned about the humanitarian situation and are working 
on how to make sure that more humanitarian goods are available 
to the people.
    Finally, I have asked a very capable diplomat, Frank 
Richardelli, to work with the opposition groups, both inside 
and outside Iraq, to work towards changing the regime. Thus, we 
have not taken our eye off Iraq. What is interesting is that 
Saddam Hussein is experiencing some serious difficulties in 
southern Iraq among the Shiites. We are watching the situation 
very carefully, and the military component is in place. The 
regime change component is in place, and we are maintaining the 
sanctions and monitoring the regime issues that we are dealing 
with in New York.
    Mr. Callahan. Mrs. Lowey.
    Thank you, Madam Secretary. Thank you, Mr. Chairman.
    Mrs. Lowey. Thank you, Mr. Chairman. I want to join my 
colleagues in welcoming you to this committee, Madam Secretary, 
and I want to express my admiration and my support for your 
firm and courageous leadership in handling this outrageous and 
colossal disaster in Kosovo, and also that of the President of 
the United States.
    In my judgment, we had no choice. The United States is the 
leader of the free world and, as you have said so articulately, 
we cannot and we could not stand by and watch the slaughter and 
destruction of families and communities and see the rape and 
pillage of life in Kosovo. So I personally want to express my 
great respect.
    We do have enormous leadership. We are the leader of the 
free world. With that leadership, in my judgment, comes great 
responsibility. I feel privileged to live in the United States 
of America and I have had great confidence in my constituents 
and constituents of other colleagues that when they hear of the 
slaughter and the inhumaneness that has taken place they rise 
to the occasion, and I have been very impressed with the 
response to the actions of the United States. I also feel that 
the national security interest in remaining engaged in Kosovo 
goes much further than the obligation to stop genocide there. 
The crisis in Kosovo, as you have expressed so eloquently, goes 
way beyond Kosovo and goes to that entire region and can 
destabilize other nations in that entire region putting more 
lives at risk and threatening the United States's interests 
throughout Europe.
    Milosevic has chosen to perpetuate his reign of terror. I 
hope that we can eventually achieve a diplomatic agreement that 
will bring true peace and stability to the Balkans. But I also 
believe that it is extremely unwise, and my colleagues have 
made that point, to rule out any military options that could 
bring this crisis to a successful conclusion. I have had 
concern from the start that whether it is this committee or 
this Congress, for us to be debating military policy when, in 
my judgment, our position should be to win and bring this to a 
conclusion.
    So I want to commend you again, Madam Secretary, and the 
President for your leadership. I think it is extremely 
important and I am delighted to know that the President is 
planning to make a statement today. I think it is extremely 
important that we lay out the facts that were expressed in the 
Washington Post article of this past Sunday, and help the 
American people understand why this action is so very 
important. I believe they feel it. I think they are outraged 
and angry when they see those pictures of terror, and I think 
it is very important that it be laid out very clearly.
    Having just returned from Europe, could you share with us 
your discussions and meetings with Russian officials and 
enlighten us to their involvement other than what we have been 
reading in the newspapers?
    Secretary Albright. Yes. First of all, let me say that we 
believe very strongly that it is important for us to have an 
ongoing relationship with Russia even while it goes through a 
difficult period and does not agree with Russia us on the NATO 
bombing. We have short, medium, and long-term interests with 
Russia that have to do with arms control issues, the CFE 
agreements in Europe, general economic issues, and issues of 
nonproliferation as well as really long range issues that we 
need to deal with them on. I spend a great deal of time talking 
with Foreign Minister Ivanov about these subjects. I also 
believe, as do our European colleagues, that it is important 
that Russia not be isolated totally on the issue of Milosevic, 
and that Milosevic should not stand between us and the 
Russians. I met with Foreign Minister Ivanov in Oslo for three 
hours on Tuesday morning, and I spoke to him earlier today. We 
and our NATO allies have agreed, as you know, on the NATO 
communique listing five demands, basically, of Milosevic, which 
include the need for a ceasefire, the stopping of the killing 
and violence; that he has to pull out his military, 
paramilitary, and police forces; that the refugees have to be 
able to go back; that there needs to be an international 
military presence in the region; and that there needs to be 
political agreement.
    When Foreign Minister Ivanov arrived, he had his versions 
of those principles. We managed after some work to agree on the 
basic aspects of all of them except on this issue of the 
international military presence. The Russian are arguing for an 
international presence because that is what they think that 
Milosevic will agree to, which would be, I think, something 
like the OSCE monitors. This is not possible because the 
Albanians are not going to go back there based on what has 
happened unless there is a military force there to serve as a 
protective mechanism for them. Thus, we have a basic agreement, 
one on the bombing and, two, on the military presence. We are 
insisting that NATO be the core of that military presence so 
that the command and control structure is one that is 
acceptable to all of us because we would need to participate in 
it. But there are ways that other forces could be attached to 
that.
    The Russians, I think, want to have Belgrade agree first to 
something before they come on board, and I have been saying to 
them that doesn't work. That is where Belgrade then has a veto 
on moving this forward. But what I have to say is that this is 
a sense that I have really gotten from the most intensive 
conversations with the Russians is that they do not want to be 
isolated on that. We should not isolate them on it. We should 
not give up our principles, and I have to continue to work so 
that the Russians understand that the Russia of the future is 
better off with a stable Europe than on the side of barbaric 
behaviors such as Milosevic's.
    Mr. Callahan. Chairman Wolf.
    Mr. Wolf. Thank you, Mr. Chairman. Madam Secretary, I 
welcome you. I wrote out some comments last night and again 
that morning that I put on paper, so my words are chosen 
carefully. Before I do, let me say that I appreciate your 
effort. I support the funding for the refugees and hope that my 
party and that Congress gives you the necessary money that you 
are asking for.
    I have had a special interest in the Balkans for a number 
of years. I have been there a number of times. It was my 
legislation that took away MFN from Ceausescu in Romanian days 
and also my effort that took away MFN from Serbia several 
years. More recently I was one of 44 Republicans who voted in 
favor of U.S. peacekeeping troops on the ground in Kosovo. I 
also--if there had been agreement. I spoke on the floor. I sent 
a personal letter to every Member on my side in support of 
that, and the other day you sent me a letter thanking me for 
that as a matter of fact.
    I returned a week ago from Albania, where I spent time with 
the refugees at the Kosovo border near the Kukes and Morina. 
Before that in February I visited Albania and Macedonia and 
Kosovo, where I spoke with many on both sides, Serbs, KLA, 
Rugova representatives, NGOs and men and women on the street. I 
believe, as Mr. Porter said and you said, human rights are 
important. There is a role that only the United States as the 
world's sole power can fill. What Milosevic is doing and what 
he has done is intolerable. He should have been stopped long 
ago. I think that administration has made a botched up mess of 
trying to do it. I think there are other options that we should 
have pursued.
    The longer that we slog around and the more refugees stream 
out of Kosovo I think that clearly other options could have 
been tried. Why did we not create an airtight economic embargo 
around Serbia? Look at the countries surrounding Serbia. They 
are all in NATO or want to be in NATO, Albania, Macedonia, 
Bulgaria or Romania, Croatia, Slovenia. They are dying to be in 
NATO and cooperate with us. Even today we could put a tight 
economic embargo on Serbia. We are bombing and killing 19-year-
old Serb soldiers when the real evil doer is Milosevic himself.
    Some years ago our government sent a high level team to 
Panama, told Noriega that he needed to step down and clear out. 
We even had a country that would have taken him and let him go 
live there. He said no, and now he is in jail in Florida. Why 
don't we try that with Milosevic? He could have gone to Russia. 
Why don't we still try that today? Otherwise tell him that he 
will be on the war criminal list.
    The administration said that the Joint Chiefs supported the 
bombing of Serbia. The Joint Chiefs said they were given the 
choice between bombing and doing nothing, and at the end of the 
day they agreed with the bombing. Some are saying that the 
bombing alone worked in Bosnia. Bombing alone did not work in 
Bosnia. Bombing in Bosnia was accompanied by a strong ground 
force provided by the Croat army. You knew that and you knew 
what they did. That is the difference between Bosnia and 
Kosovo.
    I think the administration misjudged the situation that 
brought us to where we are today. Perhaps we should leave it to 
historians to work that out but where do we go now. The United 
States must do whatever it takes to win that battle. It is 
unthinkable that we would settle for less than Kosovo or ethnic 
Albanians would live free from fear. I think Milosevic and 
others are guilty of war crimes and now must be brought to 
justice.
    Mr. Rubin mentioned nine generals. He should have had one 
more on the list. Milosevic should been on the list. If you are 
going to try those nine generals, you certainly have to try 
their leader. I think the Western World, including NATO and the 
U.S., must come to the aid of the refugees who are living an 
unbelievable life. Just the smell and the stench and the 
suffering and the pain and the agony as they cross the boarder 
and they break down in tears.
    That administration misjudged the situation there, too. We 
knew it was extremely likely that Milosevic would pounce upon 
the ethnic Albanians between the time of a Rambouillet peace 
agreement signing and when NATO peacekeepers arrived in Kosovo. 
Many of the NGOs, almost every one that I spoke to when I was 
in Kosovo a few days before February 20, said that the deadline 
they predicted brutal attacks on ethnic Albanians, particularly 
those working for the UN, the NGOs and other Western 
organizations. The drivers, our interpreters. It was like 
Vietnam in 1975 trying to clamor to get on the helicopter to 
get out. Unfortunately, they were right and the administration 
and NATO did not listen. Little was done to prepare for the 
huge exodus of the refugees and if much was done a terrible 
mess was made of it. There was really not very much nearby 
prepositioning of humanitarian services or supplies. No rating 
of care givers, equipment operators, technicians, communicators 
and others to deal with the enormous numbers of NGOs and people 
coming up there.
    I hope now that you will take whatever steps, whatever, 
whatever steps, financially and any other way, even 
extraordinary steps that are necessary to provide for the 
refugees. You are right. Everyone said my documentation was 
taken away. My papers were taken away. My license plates were 
stripped off as I came across. They are starving. They are 
sick. There are still sick today. There has been a measles 
outbreak out there and you need to have someone out there who 
can make policy decisions to not just go to Tirana but to go to 
Kukes and go into the refugee camp and talk to the people and 
be prepared to talk to the people and be prepared to get our 
military to help with the logistics and the communications. 
Other things may have been botched but we ought not to botch 
giving them the opportunity to have a life again and to live 
again and return to Kosovo and live a normal life. That is too 
important.
    I would hope that my party and I will do a letter today, 
and I just turned to the staff to say to write to the Speaker 
and Mr. Armey and Mr. DeLay and anybody in the leadership, that 
we have a moral obligation to support the refugees whereby they 
can return and lead a normal life. In the Bible in Luke it says 
to whom much is given much is expected. We have been blessed in 
this country and I think that God has blessed us and we have 
the resources here that we have an obligation now to help those 
people. In addition to that country, we should make sure that 
NATO and Germany and Austria and all of the others participate 
too and whereby they put their financial resources to help 
these refugees who have absolutely nothing to return home.
    I saw a man 65 or 70 who was blind and sitting in a corner. 
What future hope does that man have. They need the help.
    I really don't have any questions. I just wanted you to 
know the way that I felt.
    Secretary Albright. Thank you, Congressman Wolf. I admire 
everything that you have done about refugees and your 
dedication to human rights. We have met in various places 
trying to deal with that problem, and I think that we are as 
one in our dedication to it. That also goes back to something 
that Congressman Porter said: our belief in the goodness of the 
American power. I think that we are a unique country in our 
desire to help rather than overpower and dominate. I am very 
proud to represent the United States.
    Let me just say that I have spent a lot of time thinking 
about what needed to be done, what could have been done, things 
that might have been done differently. And in listening to all 
of you, not just here but in the many briefings that we did 
earlier when we were talking about a peace implementation force 
and reading the papers and thinking about that a lot, there are 
suggestions and criticisms that come from so many sides that 
there is no way just listening to all of you that having 
followed one route might have had a different outcome. 
Therefore, I am very confident that what we have done is the 
right thing. That is from my perspective of having paid 
attention to Kosovo a lot earlier than before a lot of people 
even knew where Kosovo was. Not you, but others. My thinking 
was that it was untenable for the United States to stand by and 
let a massacre happen, which, by the way, a Member did suggest 
that it was better to just let a massacre happen. Then we could 
do something.
    Ms. Pelosi. A Senator.
    Secretary Albright. A Senator, yes.
    And I am on the record as having said that we should have 
done something sooner in Bosnia because I have felt the threat 
of Milosevic very strongly for a long time and felt that we 
should take the strongest action. I have specifically resisted 
taking down any part of what is known as the outer wall of 
sanctions that would allow Milosevic to regain his stature 
within the international financial community. I believe that we 
had to try everything we could diplomatically because otherwise 
what Chairman Callahan said is true--that people would say all 
she wants to do is use American forces. And we tried. I happen 
to believe that to have tighter sanctions, though much desired, 
would not have worked because even forces at that stage are 
having difficulty getting him out. Plus I have spent a lot of 
time with what we called front line states, and the sanctions 
affect them. We are very eager to help. They are very loyal, 
but they are very concerned about their fragile economies.
    There are lots of different options and a lot of 20-20 
hindsight and second-guessing. But I have to tell you that I 
feel proud of what the United States has done and will continue 
to do.
    On the refugee issue, we did preposition an awful lot of 
food for a lot of people for a long time. But as you and others 
have said, the horror of the exodus is in Biblical proportions. 
It was hard to predict the huge numbers, but within a couple of 
days we got it under control. I am very proud of the way that 
our military and NATO and the NGOs are now cooperating to 
overcome a lot of the problems in the camps. We will continue 
to do so. And I am very, very grateful for what have you said 
in terms of helping us get the funds so that we can stand tall 
and be proud of what we are doing for the refugees who are the 
victims of the most horrendous acts by a brutal dictator.
    Mr. Callahan. One of the newest members of our committee is 
always so patient. She comes to every hearing, promptly on time 
and she sits here patiently while we take 15 minutes and then 
tell her that she can't have but 5 minutes. So today, Ms. 
Kilpatrick, you can have as much time as you like.
    Ms. Kilpatrick. I do like this Chairman. I like this 
Chairman.
    Mr. Callahan. You have no power to yield.
    Ms. Kilpatrick. I will try to stay within the time. Thank 
you very much for the opportunity and, Madam Secretary, for 
your leadership, as has been mentioned by my colleagues. We 
appreciate and thank you for the sacrifices that you make in 
your personal life with your family, moving around the world to 
represent our country.
    I, too, would not want to second-guess the administration, 
the President and those of you who have taken an oath to uphold 
our Constitution, protect our rights, and see that our country 
maintains its number one position in the world. In that vein 
and with what you have already spoken, if you believe our 
strategy is correct after looking at all the options over 
several years and knowing that region of the world as I know 
you do, I would totally support you in that effort and 
appreciate the work you have done.
    Due to the war in Kosovo today we aren't able to talk about 
the budget as I would like to talk about it. I think, even 
going in, the President's request is underfunded. I know the 
Senate wants to cut a certain percentage and the House wants to 
cut even more. But the foreign aid needed to maintain our 
position in the world is underfunded in the foreign operations 
budget. If, in fact, the anticipated 15 percent cut in Foreign 
Operations, or some part thereof goes into effect, I do 
question our place in the world and how we will meet the crises 
that are out there.
    I recently returned from overseas, where I visited the 
continent of Africa. This was my eighth or ninth visit there. 
As the ranking member mentioned, AIDS/HIV has no boundaries. I 
am always wary about what our servicemen and women face 
regarding the HIV/AIDS epidemic in Africa, India, close by and 
around the world. I wish our budget were able to talk about 
that and do something about it.
    We did have a President's representative from USAID and 
others on the Africa tour with us, and some things they are 
doing very well. Senator Hatch and others who attended know of 
the good work they are doing. But there is so much more that 
needs to be done. I want to see USAID and the other African 
development banks and foundations be properly funded so they 
can address this crisis. HIV infection is a global crisis. We 
have to remove the stigma of the illness and begin to educate 
not just abroad but within our country. It as a major crisis as 
we move to the new millennium.
    Having said that, I want to move to the prisoners. We had 
some discussion, you and I.
    Of the three prisoners who are captured, one is from the 
State of Michigan. We are at war. The family has been up and 
down. I think the news media erroneously lets them believe 
something is going to happen. Then nothing happens and they 
tend to fall back into disbelief in what is happening when we 
are at war.
    What is the status of the three prisoners? How hopeful can 
we be? What is the Administration's position? What can I tell 
this family, if anything?
    Secretary Albright. Well, first of all, let me go to the 
point that you made about HIV/AIDS, and Ms. Pelosi made. It is 
a major concern to us. It is a priority in terms of dealing 
with issues at AID and within the Department. We have supported 
activities at the United Nations with their pressure to try to 
deal with the issue, only not enough. But I can just assure you 
both that it is a priority issue for us for all the reasons 
that you have stated. Unfortunately, as with many programs, we 
do not have the kind of money that we need to pursue all of the 
things that we need to do.
    On the three soldiers, we have made very clear that we want 
them back unconditionally, that they are entitled to be treated 
according to the Geneva Convention, and that they cannot be 
mistreated. They have not yet been able to have access by the 
ICRC, which they are entitled to have.
    I must say, I get increasingly irritated every time I see 
the Yugoslav representative to the United Nations being asked 
politely by our press as to whether the ICRC has been allowed 
to see them, and he says I have to check. Well, it seems to me 
that there should be a follow-up question as to how long does 
it take, and why are you lying to me every time that you are on 
television?
    But I think that we need to continue to insist on that. I 
think the difficult part occurs when there are attempts to get 
them out but there is a condition on something which puts the 
President and the American people and, obviously, the families 
into a dreadful position, as we look at this as a human 
problem. To start bargaining over them is an unacceptable way 
for us to pursue our goals as well as to try to get them out. 
We are working very hard in every way, but they cannot become 
pawns. They must be released unconditionally.
    Ms. Kilpatrick. And you do let the families know that last 
statement.
    Secretary Albright. Yes, we do.
    Ms. Kilpatrick. This $400 million supplemental that is 
coming through--I hope I heard no offsets, did I not?
    Secretary Albright. Well, yes, I hope I did, too.
    Ms. Kilpatrick. Because offsets will again cut away at the 
domestic programs we like to see funded. That is the position 
of the President?
    Secretary Albright. Yes, no offsets.
    Ms. Kilpatrick. I think I heard the chairman of the full 
committee say that, but not my subcommittee chairman.
    Mr. Callahan. To respond to that, I agree that this money 
should not be offset. The budget agreement specifically 
excluded emergency disaster assistance. Although I do not make 
that decision, if I am asked for input, I would certainly 
recommend that we do not have offsets.
    Ms. Kilpatrick. Thank you, Mr. Chairman.
    Thank you, Madam Secretary.
    Mr. Callahan. Chairman Packard.
    Mr. Packard. Thank you, Mr. Chairman; and welcome, Madam 
Secretary. I have the highest regard for your professionalism 
and the way you represent our country as you go around the 
world with these very difficult problems.
    I opposed sending the bombers. I oppose sending the ground 
troops as the administration still seems to oppose, but we are 
there. I felt that we had not exhausted all of our options, our 
diplomatic options.
    Mr. Wolf expressed very much my feelings that we could have 
tried sanctions, strict embargoes like we have done in other 
places. We could have considered the policy that we have had in 
the Middle East for a long time, and that is to try to develop 
a balance of power so that no one would gain by attacking the 
other. It has worked in the Middle East to a large extent over 
a long, sustained period of time. I am not sure whether there 
was any consideration of arming the Albanians or others to make 
a balance of power.
    But the fact is, the destruction of homes, the displacement 
of families, the loss of lives, and terrible rapes and 
atrocities have greatly increased since the bombs have fallen.
    Of course, our hearts go out to the refugees and the 
Albanians. There isn't anyone that couldn't help but feel for 
them. But yesterday, this administration considered the KLA, 
the Albanian army, as a terrorist group; and today we are 
prepared to do their fighting for them.
    We have spent years and years and billions of dollars in 
developing a compatible relationship with Russia and to a huge 
extent in recent days that has been grossly and greatly 
undermined. There is a significant anti-American attitude in 
Russia that didn't exist before.
    We have not achieved our objectives in Bosnia. And of 
course the killing has stopped, but that could easily return if 
we withdrew. We have not achieved our goals, and we are not 
winning in Iraq, as has been mentioned. I see a long-drawn-out, 
sustained campaign here with no assurance of success; and, of 
course, it greatly concerns me.
    I have met with Milosevic, and he is a thug. He is a crafty 
thug, one that I believe will not be any easier to deal with 
than Hussein or Qadhafi or others that are still in power. I 
have really deep concerns about where we are going with this.
    But we are there. We have sent our planes, and we are 
considering sending ground troops, and maybe that is the only 
solution. But I still believe that there are other options, 
that strict embargoes, sanctions, perhaps even considering 
arming to bring about a balance of power would be a cheaper, 
certainly a less destructive and more humane way.
    Did we consider at all the policy that we had in the Middle 
East in terms of developing a balance of power? Because that 
would have solved perhaps or could perhaps solve the problems 
we have had in Bosnia and certainly in Kosovo.
    Secretary Albright. Thank you. Let me say again--and I 
really feel it very important to say this--all the suggestions 
that you have made and Congressman Wolf made about did we 
consider this, or did we consider that--we did. This is a very 
difficult problem, and we have looked at every aspect of this, 
and we are concerned about the relationship with the Russians. 
Everything that you have said, I can assure you that we have 
looked at and have, for one reason or another, felt that it 
would not work.
    As I sit here, and I think, you know, that you are critical 
of our using force, there are those who have also been critical 
of me for having tried diplomacy, saying that Rambouillet was a 
mistake. Why were we even thinking of dealing with them there? 
And there are those who are now saying, why did we ever make 
any agreements with Milosevic? Are we going to make any 
agreements with him now?
    For these reasons I return to the answer that I gave to 
Congressman Wolf. I feel that we are doing the right thing 
because we have tried and thought about all of these aspects, 
and it is a really intractable set of problems that are not 
soluble.
    Let's talk about the KLA, for instance, and arming them.
    First of all, we didn't consider them a terrorist 
organization. We thought that some of their actions were 
questionable in terms of what we thought of as being 
provocative, and there were certainly those who felt that they 
should not have been doing what they were doing.
    Mr. Packard. But I think it is very difficult to know who 
the bad guys and the good guys are in that region.
    Secretary Albright. Yes, that goes to exactly your point. 
You are now saying, why didn't we begin arming them to have a 
balance of power? Then you are also saying that we should have 
an embargo. Well, there is an embargo. It is an arms embargo. 
And if we were to arm the KLA, and there are those who suggest 
it, then you know very well that tomorrow others would be 
arming the Serbs.
    It is possible now at some stage that we can have a balance 
of forces. But the Serb army, as we know, and knew before, is a 
very powerful army. They had a very strong force. And they are 
resisting. There is no way you could have a balance of forces, 
without having broken the back of that army which we are in the 
process of doing.
    While it would be nice to have an embargo, you can't be 
saying that you want to arm them in order to break the embargo. 
And there are a lot of economic sanctions on the Serbs.
    Believe me, we have looked at all these angles. I really 
appreciate having this kind of a discussion, because I think 
that when we talk about it, I think that the American people, I 
hope, understood the difficulties of dealing with what is a 
multiple dimensional problem, where you have to look at where 
these people are, how you deal with it, how it affects other 
policies.
    Mr. Packard. I appreciate very much your competency and 
your ability. I have no questions about that. And it is easy to 
go back and try to review.
    Secretary Albright. Thank you.
    Mr. Packard. But I recognize the difficulty of your 
position.
    Secretary Albright. Thank you.
    Mr. Callahan. Mr. Knollenberg.
    Mr. Knollenberg. Madam Secretary, welcome. Good to see you.
    I have one issue which I think you have had several 
questions on. It has to do with burden sharing in the conflict 
in Kosovo. I think you basically declined in previous 
questions, and maybe that is because you don't have that data. 
I am not suggesting that you should have it this morning, your 
staff may, but this is something I would really like to know. 
The early reports indicate that we were burdened with about 55 
to 80 percent, depending upon who was counting, when it comes 
to munitions, airplanes, and in fact, even humanitarian aid.
    You don't have to respond at this time unless you have got 
something on hand, because I really want to focus on another 
question with respect to Russia. That will take some time and I 
would like to move forward. But please answer if you can do it 
quickly, to give me some semblance of numbers.
    Secretary Albright. Well, let me just say that there really 
is a considerable amount of burden sharing in the air campaign. 
I won't go through this with you, but we will provide the 
material to you.
    There are a number of countries that have contributed. 
Naval contributions have been made. We do have the best Air 
Force in the world, and I think that a lot of the choices 
having been made are made on the basis of trying to accomplish 
the mission.
    But I will get this to you as well as the burden sharing in 
terms of the future reconstruction and humanitarian assistance.
    [The information follows:]

    Question: Are the Europeans bearing their share of the burden in 
Kosovo? What is their share and what is the U.S. share on the military 
effort, reconstruction and humanitarian assistance respectively?
    Answer. Yes. The Europeans are bearing their share of the burden in 
Kosovo on the military effort and on humanitarian assistance, and they 
have committed to take the lead in reconstruction, which has not yet 
begun.
    On the military effort, our NATO allies provided significant 
military assets to the air campaign against the FRY (``Allied Force''), 
and are providing far more ground troops than we are in KFOR.
    During Operation Allied Force, fourteen of the other eighteen 
Allies contributed over 325 aircraft to the air campaign. Although the 
U.S. contributed 80 pct of support aircraft, Allies flew over 40 
percent of strike sorties. Nine Allies also contributed naval assets, 
including aircraft carriers, submarines, destroyers, and frigates.
    Our European Allies are contributing the vast majority of KFOR 
troops. Approximately 7,000 U.S. troops will participate in KFOR, which 
will number 52,000 at full strength. Fewer than one in seven soldiers 
will be American.
    On the humanitarian and reconstruction side:
    As of April 1999, the European Commission had already put aside an 
extra 250 million Euros (approximately $260 million) for economic and 
humanitarian emergency assistance to states neighboring Kosovo--at a 
time when you will remember that humanitarian assistance in Kosovo 
itself was not possible, but when assistance was desperately needed for 
the Kosovar refugees flowing to the neighboring states. The budgeted 
total EU non-military assistance (i.e. economic support and 
humanitarian aid) to these States adds up to over $1.5 billion in CY 
1999. This is far more than what the U.S. will pay for this calendar 
year.
    At their Summit in Cologne on June 3-4, the Heads of State or 
Government of the European Union reiterated the European Union's 
commitment to take a leading role in the reconstruction efforts in 
Kosovo, under the auspices of the U.N. provisional administration. A 
European Kosovo Reconstruction Agency is in the process of being set 
up. It will allow for more flexible and more rapid disbursement of 
funds than with present mechanisms.
    In sum, the U.S. will do its share, but our effort will be 
coordinated with a far larger effort by our European partners and the 
International Community. Just what is our fair share will need to be 
decided in consultation with the Congress. As we re-establish a ground 
presence in Kosovo, we will also get a better feel for short-term and 
longer-term needs.
    Europe's willingness to assume a larger role in Kosovo today is to 
be welcomed. However, with greater European responsibility for peace-
keeping and reconstruction will also come a proportionately greater 
leadership role than we have seen in the past.

    Mr. Callahan. If the gentleman would yield, I wonder if we 
could ask respectfully that you give us these burden sharing 
reports on a monthly basis.
    Secretary Albright. We will do so, if it is possible. I 
think the Pentagon has to provide a lot of that.
    Mr. Knollenberg. I am sure it is. That is to be expected.
    I want to thank you for your candid perspective on the 
state of the U.S.-Russian relations regarding Kosovo. As you 
said, we do find ourselves at an impasse with a few basic 
disagreements. I am concerned about the possible U.S. relations 
to Russia's intransigence with respect to this campaign.
    Since the fall of the Soviet Union, the U.S. has pledged 
billions of dollars in foreign aid to support Russia. Now, we 
have an interesting situation developing in this campaign. 
Russia is making it very clear it will not support our allied 
efforts there. In fact, some reports allege that Russia is 
already actively helping Milosevic's efforts against NATO.
    Do you have any knowledge which you can share with this 
committee on Russian activities in support of Milosevic? I know 
you have been talking at length with Foreign Minister Ivanov. 
Perhaps from some of those conversations, you can tell us what 
Russian action, if any, is there that would embrace Milosevic 
or support him in his current endeavor?
    Secretary Albright. Well, I think there is not a united and 
monolithic, quote, Russian approach to this.
    First of all, the Russian leadership has said that they do 
not wish to be drawn into a military assistance to Milosevic. 
There are, however, as you know, groups within Russia, who are 
also playing their nationalist card. There is some evidence of 
volunteers going there. But, I have been told that is not a 
government supported activity.
    I think where the Russians find themselves, frankly, is--
and I found this in my dealings with them at Rambouillet or in 
contact group activities or in personal conversations--with a 
great deal of frustration with Milosevic. And they agreed when 
we were at Rambouillet on the fact that the Serbs had said that 
they would go along with the political parties to this 
document. When all of a sudden Milosevic said that he wouldn't, 
the Russians knew that the Serbs had walked it back. There has 
always been a disagreement about the implementation of a peace 
agreement by the presence of a NATO core force, and we have 
disagreed on that. We are also concerned about Russian 
humanitarian assistance going to the Serbs.
    Mr. Knollenberg. The Russian convoy that was intercepted.
    Secretary Albright. Right, I was speaking to that. And what 
I found very interesting is that this convoy is going through 
Hungary, and Hungary, as a new NATO member, is taking 
incredible care with examining that convoy, stopping certain 
portions of it that they felt had an overly large amount of 
fuel. And I think that for those who questioned the value of 
new NATO membership, I think that Hungary has already shown 
that it is a good ally and partner because they have done that.
    Mr. Knollenberg. And I think they should. The way I look at 
it is we are giving huge amounts of aid, to Russia, and have 
been for several years. At the same time, we see Russia 
providing aid; to Milosevic. In addition some of that aid was, 
stalled because it was fuel which could have been used in the 
war effort. And I commend Hungary for doing just that.
    But there is something about money. Money is fungible. We 
give aid to Russia. They give aid to Serbia, who is challenging 
us, who is our opponent. It gets a little bit scary, a little 
bothersome. This fungibility issue is one we must pay close 
attention to.
    I applaud what Hungary is doing to stop, to screen, to 
oversee everything coming in through the country; but I would 
point out, and I hope you have some concerns about, this issue.
    Secretary Albright. Yes.
    Mr. Knollenberg. Because when you give money to Russia, 
they can spend it pretty much anyway they want.
    Secretary Albright. Believe me, it is something that we are 
concerned about. And I have made very clear, as has the 
President, that they should not let their sympathy for some for 
their Slavic brothers to be translated into any kind of genuine 
military assistance, and we will continue to press them.
    Let me just make some comments about Russia. We have worked 
very hard to try to develop a new kind of relationship with a 
new kind of Russia; and a lot of the assistance has to do with 
something that is in our national interest, such as the Nunn-
Lugar program of trying to buy up their nuclear weapons. And, 
as I mentioned in my testimony, the initiative of the President 
to try to reduce the threats of loose nukes to try to make sure 
that the scientists don't go to the highest bidder. Thus, we 
have our own national interests to pursue in dealing and 
targeting our assistance to them.
    Also, we are trying to build up the democratic forces in 
Russia versus what are clearly resurgent nationalist or 
communist forces.
    I pride myself on my day-to-day contacts with the Russians 
of trying to walk the line of saying we have long-term 
interests here, but what you are doing vis-a-vis Serbia with 
the ship that they sent or their providing assistance is 
counterproductive to where we are trying to go. But I am trying 
not to crater this relationship. It is too important to us.
    Mr. Knollenberg. Mr. Chairman, one 30-second question. Are 
we doing anything to ensure that the friendly Serb government 
of Montenegro led by Mr. Djukanovic remains in power? Is that 
relationship strong?
    Secretary Albright. Yes.
    Let me just add one point on the Russian part. Very little 
of the assistance that we have goes to the government. It goes 
to a variety of entities that are in support of democracy 
programs.
    On Montenegro, we have been very concerned about that 
situation. We have a very good relationship with the 
democratically elected President of Montenegro, Mr. Djukanovic. 
And we see Montenegro as key to the stability of the region; 
moreover, Mr. Djukanovic's is the only democratic regime within 
the former Yugoslavia now.
    We are staying in very close touch. We are also trying to 
be helpful in terms of dealing with the refugees that have gone 
into Montenegro. We have given them $10 million--you all know 
this--in assistance recently in order to underline the 
importance of the region and to help Djukanovic.
    There is no question that the situation in Montenegro is 
very tense. Djukanovic has made clear that he opposes the 
military campaigns of Milosevic, and that he is supporting what 
we are doing.
    In my conversations with my fellow foreign ministers we 
have made it very clear in the various statements that any 
action that spreads this to Montenegro would have the gravest 
consequences. They are as concerned as Djukanovic and we are. 
While he is in a very delicate situation, he is aware of our 
support for him.
    Mr. Knollenberg. Thank you.
    Thank you, Mr. Chairman.
    Mr. Callahan. I would echo Mr. Knollenberg's sentiments 
about Montenegro. They are desperately trying to create some 
degree of democracy there. And when I see that our war planes 
or NATO war planes are bombing Montenegro, I am sure it gives 
President Djukanovic heartburn. I understand the strategic 
necessity in what NATO is doing, bombing facilities in 
Montenegro, but I hope it does not create a perception that the 
President in Montenegro is desperately trying to convince the 
people that America's ideas are the right way to go, and then 
wakes up the next morning and sees in a sense NATO and American 
bombers bombing his country. So I hope we can get the message 
out that we are very supportive of the regime in Montenegro and 
that we want to assist them as the $10 million has done.
    Secretary Albright. Mr. Chairman, if I might just comment 
on this, President Djukanovic does not support the NATO 
bombing. He supports generally our approach to trying to deal 
with the Kosovo ethnic cleansing. And on the bombing within 
Montenegro, we are very sensitive to exactly what you are 
saying. But part of the problem is that some of the air 
defenses were in Montenegro and in order for our pilots to 
operate that was necessary.
    Also, if our pilots are illuminated by air defenses out of 
Montenegro, or if there are MiGs flying, they have to take that 
action. But I have to tell you that we have worked very hard to 
be sensitive to Djukanovic's problems.
    Mr. Callahan. I know, but I don't know what the media 
situation is, the news situation in Montenegro is. I know that 
Milosevic has cut it off, and the Serbian people in Belgrade 
are only receiving what he wants them to hear. And I don't know 
in Djukanovic's case if that is the case there, that his people 
have been told by him that America's friendship is the way to 
go for the future of Montenegro; and if there is no media and 
all they know is what Milosevic is telling them, that the 
Americans are bombing you, which is probably what he is saying. 
It could create a political problem for the president there.
    Secretary Albright. On the point of the media, if I just 
might take a minute, I think there is no question that the 
propaganda machine that Milosevic has is very powerful. We are 
working in every way to break through it.
    I have, in my Czech-accented Serb, broadcast a message. I 
am now going to do it on a daily basis in order to try to have 
people understand that we have no fight with the Serbian people 
or the Montenegrins, for that matter. We are doing everything 
we can in terms of our ability to penetrate through this 
propaganda-airtight environment that he has. It is a major 
problem, but we are working on it. We have a whole program.
    Mr. Callahan. Thank you.
    Mr. Jackson.
    Mr. Jackson. Thank you very much, Mr. Chairman.
    Let me also begin by apologizing for having to be in many 
places at the same time.
    I want to start by welcoming Secretary Albright and thank 
her for her testimony.
    Madam Secretary, I share some of the concerns regarding the 
conflict in the Balkans that many of my colleagues on the 
subcommittee have expressed today. Also, it is important--I am 
concerned and actually troubled by the critically low funding 
provided for the Function 150 account in the budget resolution 
adopted yesterday. I want to work with other members of this 
subcommittee and the full committee to ensure that the State 
Department receives the funding it needs to carry out its very 
important mission throughout our world.
    I want to shift, if I can for just a moment, to the issue 
in the Balkans; and I don't want my line of questioning to be 
confused at all with my support of the troops in this vital 
part of the world.
    However, Madam Secretary, I am not totally convinced that 
our political military expectation can produce the result that 
we expect. I am more than convinced that we can punish people 
with an air campaign and cruise missiles, but to take land, it 
is becoming increasingly clear that we possibly need ground 
troops. We control the skies above Yugoslavia, but the refugees 
need their land back.
    In the Gulf crisis, we saw that in order to regain Kuwait 
it was very important that we send in ground troops in order to 
get land back for the Kuwait government and the people of 
Yugoslavia.
    Congressman Rod Blagojevich from Illinois, as reported by 
Mike Dolning of the Chicago Tribune, has suggested that the 
partitioning of Kosovo will potentially likely be part of any 
end game solution. I am wondering, has the administration 
considered this approach or have they talked with Congressman 
Rod Blagojevich?
    Secretary Albright. Let me just say that, as we look at 
potential solutions, there are those who have talked about 
partition. However, I specifically asked for a map that would 
indicate to me whether that was possible to have one part be 
Serbian and the rest be Albanian.
    The Serbians have spoken a lot about the fact, and 
rightfully so, that they have monasteries and holy places in 
Kosovo that have great historical and cultural significance to 
them. This map, however, shows that it is impossible to do 
anything like that. It is too small for me to display it. But, 
I basically, the monasteries and the various other historical 
sites are scattered throughout Kosovo. It is a checkerboard. It 
is not one area that can be partitioned to be under Serbian 
control.
    I think that we also have felt that partition is not an 
approach that is useful as we have dealt with Bosnia and the 
messages that it sends about the fact that the future should be 
democratic and multiethnic. I have not spoken to the 
Congressman myself, I specifically asked to try to get an 
ethnic and a religious site map, so to speak, and there is no 
way to partition unless you just artificially decide that a 
certain area should be Serb, and I don't know what you would do 
with all these various ways of trying to allocate the 
monasteries on the other side.
    Mr. Jackson. I thank you for your answer.
    There are those who have argued--I have seen it in the 
press--that so far our military strength; our air campaign, has 
not equalled our goal of a free Kosovo. That our military 
strength; the air campaign at this stage of the game has 
created and had some role to play in the present refugee 
crisis; whether it is increased Serb aggression, Mr. 
Milosevic's determination to take control over all of Kosovo.
    My question again is, around the end game of refugees, was 
there ever an anticipation or discussions about the possibility 
within the administration of the likely human catastrophe that 
could be the end result of a sustained air campaign without 
forces on the ground?
    Secretary Albright. First of all, let me say that the main 
discussions that we had were about the humanitarian disaster 
that would be caused if we didn't do anything because of the 
plans that we now know even more about were set up and planned 
by Milosevic to systematically reengineer the ethnic 
composition of Kosovo. What his policy was earlier, before 
Rambouillet, was basically a village a day. He was going in 
with his people and torching villages with the idea that that 
would keep NATO away because it was being done just one village 
at a time. Now we know that he had this plan to really 
ethnically cleanse the whole place.
    What I do think happened as a result of bombing, as I have 
said previously, was that this was like a videotape that he 
then put into fast forward so that really the number of 
refugees that were created immediately after the bombing was 
something that happened because he had a systematic plan 
already. There is no way they could have done what they did 
going from house to house if they had not had a systematic plan 
in place before hand.
    We do think it is important for the refugees to be able to 
go back. They are not the cause of this, but they are the 
reason that we have to pursue the objective that they can go 
back. They will need to have a protective force. That is why we 
are arguing for an international military force in order that 
they can live where they belong.
    Mr. Jackson. Thank you, Madam Secretary; and thank you, Mr. 
Chairman.
    Mr. Callahan. Thank you.
    Mr. Forbes.
    Mr. Forbes. Thank you, Mr. Chairman.
    Madam Secretary, I think you do know of my very high regard 
for your expertise in foreign policy and what you bring to this 
job. We have had some differences over the years perhaps about 
our approaches on the Oslo accords and other things, but I have 
tremendous respect for you, and I appreciate what you are doing 
now, and I am proud to have erred on the side of giving the 
President the discretion that he needs to approach the very 
difficult crisis we have in Yugoslavia.
    But, having said that, if you would permit me for a second 
here, I find it really ironic, Madam Secretary, that for most 
of this century we have pursued what we can only best call a 
``big stick'' approach, having a secure and well-funded 
national security apparatus so that our Secretaries of State 
can pursue with great vigor a peace and freedom-oriented 
foreign policy. So I do find it a little bit ironic that there 
is a little bit of lamenting about how we are funding our 
foreign policy here in the Congress over the last several years 
and yet many of my colleagues and even the Clinton 
administration itself has underfunded our national defense 
needs.
     This is no more obvious, I think, than where we are today 
with this crisis in Yugoslavia, we have got a situation in Iraq 
where we have got a very tenuous situation, the situation in 
Bosnia, and of course numerous other potential hot spots. So I 
do find it a little ironic that there are many of my colleagues 
today who are arguing for ground troops to support the air 
campaign and yet these are the very people who have not thought 
anything of actually taking money away from the Defense budget 
in support of what they feel are more important priorities.
    So we are dealing with a hollowed out defense. I know that 
that is more the purview of your colleague, Secretary Cohen, 
and others, but I think it does serve to undercut your ability 
as an effective Secretary of State.
    But if I may, Madam Secretary, have you recommended and can 
we expect that the President of the United States will come to 
the Congress and officially lay out for the American people and 
their representatives our mission in Yugoslavia and what we can 
expect? And I say that again after 2 weeks of spending a lot of 
time in my district, Long Island, New York, where there is a 
rising degree of anxiety that we are sliding into a situation 
that I can only best describe as a ``Vietnam phenomenon'' and 
there is great, great anxiety by Americans and I think my 
constituents that, if we don't finish, we are sliding into that 
situation.
    Secretary Albright. Congressman, thank you very much for 
your kind words and our previous discussions on the subject.
    Let me say that I think the President, as you know, has 
already given a speech today in which there will be a fuller 
discussion of Kosovo. He has spent a great deal of time with 
Members of Congress. He will continue to do so.
    Mr. Forbes. We expect him to formally come up here and make 
that case. I think that is the least that can be done, 
particularly for those who are wanting to err on the side of 
supporting the President's discretion.
    Secretary Albright. I am not going to predict, where the 
President makes his speeches, but I can tell you that he has 
been making more speeches and statements on this in the last 
several weeks than I think many previous presidents have in 
talking about foreign policy issues, and he will continue to do 
so.
    I will pass on your suggestion to him. I do not know where 
and how he is going to continue making his case, our case.
    Mr. Forbes. Madam Secretary, another issue that has 
arisen--some of my constituents at a number of town meetings--
is that we feel the need to be involved in Yugoslavia for some 
very correct reasons articulated by many of my colleagues and 
most particularly Mr. Wolf and others. The same question could 
be asked about our involvement in Africa and the genocide that 
has taken place there and what the United States approach is 
there vis-a-vis the same need to be in Yugoslavia.
    Secretary Albright. Well, first of all, I think that we are 
all very concerned about the spreading of violence in Africa 
and are doing our best to work with the African countries, the 
OAU, in an attempt to solve as many of those problems as we can 
diplomatically, and work on supporting an African crisis 
response force.
    I think one of the reasons that there is a difference is 
that this is within Europe, a NATO area, where there is a 
military organization of which we are the leader. But it does 
not say that we are not interested in trying to help as much as 
possible in resolving many of the problems that we now see in 
Africa. Part of our request to all of you is to figure out how 
to give greater support to African justice initiatives, trade 
initiatives, and a variety of other ways to help democracies in 
Africa prosper.
    I spoke in my opening remarks about the need now to support 
the new democracy in Nigeria.
    I think that this is one of those damned if you do, damned 
if you don't circumstances. If I came here and asked you for 
money for every conflict in the world, you would say the U.S. 
is trying to solve everything. And if I don't, then you say 
that we are not paying attention to them. There is no cookie-
cutter approach to this. We are trying different methods in 
different places, but we are equally concerned about the 
killings in Africa and the cross-border activities and the 
spread of violence there.
    Mr. Forbes. Mr. Chairman, I would hope--that perhaps a 
bipartisan leadership of this Congress could send a letter to 
the President inviting him to come up here to fully explain our 
policy and our objectives. While I personally oppose ground 
troops, I do want to err on the side of giving the President of 
the United States the discretion to conduct foreign policy, but 
I would feel more comfortable if we could get the President to 
come to the Congress and play out our policy in a proper forum.
    Mr. Callahan. The gentleman makes a good point.
    Madam Secretary, you, Secretary Cohen and the President 
have been very generous in your time keeping some of us 
informed about what is taking place. And I know that Tuesday in 
a White House meeting Speaker Hastert suggested to the 
President that he better inform the American people.
    And your suggestion that he address the entire House and 
Senate is excellent. I think that we should convey, maybe 
through our conference, to the Speaker, to invite the President 
to come to Capitol Hill so he can talk to all Members of 
Congress. Because those of you who have not had the opportunity 
to be briefed or attend classified meetings, you have to answer 
the same questions in Long Island I have to answer in Alabama. 
It is unfair that some Members of Congress know what is going 
on and some people have not been apprised of anything but what 
we tell them or what they read in the paper.
    So it is an excellent suggestion, and I will convey that 
along with you to the Speaker. I will draft a letter, and you 
and I can sign it this afternoon. Maybe we can get some input 
from Chairman Lewis as to whether or not this is the time for 
the President to come and explain our direction and our exit 
policy in Kosovo.
    We are going to go, Madam Secretary. I don't know what your 
time schedule is. I know you are very busy and rightfully so. 
We had very little time in which to----
    I am sorry, Jack. Are you off the phone now?
    Mr. Kingston. Are you through talking now, Mr. Chairman?
    Madam Secretary, I, too, am having trouble following this 
administration's foreign policy. Cambodia, 2 million people 
were slaughtered; Rwanda, 500,000 died. There is a war right 
now between Ethiopia and Eritrea, and women are being raped 
over there, civilians are also being killed. At what point does 
something become an American peril? And I guess if you could 
define that generally and tell me what the American peril is in 
Yugoslavia right now.
    You know, I have heard that question answered several 
times, but it is interesting, different members of the 
administration answer it differently, and I am never quite sure 
it has kind of hit the bull's eye in maybe what I am looking 
for or maybe I am just missing it.
    Secretary Albright. First of all, let me say that there are 
a number of component parts I think that come into play. Some 
of it has to do with the ability to influence the situation. 
You choose your tools depending upon your ability to do that.
    If you take Ethiopia and Eritrea, we have sent envoys and 
negotiators and are supporting the OAU in trying to deal with 
that problem.
    I think one of the hardest issues that I feel personally 
about is Rwanda where we did not have the ability to move more 
swiftly, and the President has made that point. That was 
something that exploded like a volcano, and we tried very hard 
to make up for it later. But I do think that is one that I 
always have a hard time with myself.
    I think as far as Yugoslavia is concerned that, as I said 
earlier, there is a humanitarian interest that is important but 
also a strategic interest as far as the Balkans are concerned. 
We have been talking about the importance of having a stable 
and secure Europe. A stable and secure Europe is important for 
the United States. We have spent large amounts of money during 
this century either fighting wars in Europe or trying to 
prevent them and developing an alliance that is the most 
powerful in the world, that has deterred the Soviets during the 
Cold War, and now is there in a leadership role. A mechanism 
exists for dealing with a problem as horrendous as the ethnic 
cleansing in Yugoslavia.
    But let me say that this is not the way it was during the 
Cold War, where you could make a list. I was a professor, and I 
did this. Do you know where our vital national interest are? 
Are there certain strategic choke points to prevent the 
movement of arms?
    We are dealing with a very different kind of a world where 
there are huge problems that we can deal with bilaterally or 
through an alliance or through the United Nations or through 
various other organizations. We have to choose our tools, and 
we have to choose what our interests are. We may not agree, and 
we may not have the resources to deal with everything that we 
want to, but I can just assure you that we think very carefully 
about where to involve ourselves and the resources that we have 
to do it.
    Mr. Kingston. Well, then, are you inferring that the 
administration has sat down and carefully decided that Rwanda 
we did not need to get involved in, Cambodia we did not need to 
get involved in, but here we did? Is that the balance?
    Secretary Albright. No. I mean that the point here is that 
we try to use the best tool that we can to be involved at the 
level that we should be. I am saying to you that I have always 
felt on Rwanda that we should have done more.
    Mr. Kingston. But not in Cambodia?
    Secretary Albright. In Cambodia we went at it a different 
way. Let me just say that I think, that because we can't do 
everything everywhere doesn't mean we should do nothing 
nowhere. I think that is English.
    Mr. Kingston. I understand. I understand. I am just trying 
to--I guess on the tier of reality there was a judgment call 
that a stabilized Europe was more important than a stabilized 
Africa or a stabilized Southeast Asia.
    Secretary Albright. No, I don't want to be put in that 
position. I think that a stabilized Europe is something that 
has been important to us; a stabilized Asia, which is why we 
are paying so much attention to what is going on in Korea. I 
think that we really look at the issues and try to deal with 
them on the basis of what tools we have available and what the 
situation is at the time.
    Do we do it perfectly? No. Did previous administrations? 
No. Will the next administrations do it perfectly? No. But I 
think that we have to look at each of these situations and 
assess where we think we need to apply pressure.
    Mr. Kingston. I think, as you said, there is a ``damned if 
you do, damned if you don't'' that all administrations are 
faced with. But this underscores the purpose of the President 
communicating with the Congress as to what the policy is and 
what some of the judgment calls, so that there is less maybe 
suspicion or second guessing.
    Let me address something on offsets, and I know that we 
have made the statement already: No offsets. Personally, I 
agree with that. I think that if there is an American peril, 
then it is in our interest to say, you know what? This is so 
vital to the American interest that this year we are going to 
have to cut the budgets of some things which we deem less 
important than the economic stability of Europe. And I am only 
making that statement on the record.
    I believe there are other Members of Congress, and I 
realize it is the minority, but I believe there are Members on 
both sides who feel that if we are going to engage, we have 
already spent $10 billion in the Balkans, we need to start 
looking about where we are going to spend this.
    Because at some point, just as in a household, you have to 
make a decision: Do you fix the washer or tune up the car. I 
know, how could he compare that? I don't know. I just have the 
common sense of a normal American. But we need to give the 
American people that debate instead of just spending and 
spending.
    Secretary Albright. With all due respect, Congressman, you 
have just contradicted yourself. You have asked me, why we 
didn't do anything in Rwanda or Cambodian, and yet you are 
saying that we have to choose our priorities. I am here asking 
you for some money for Africa; and you are telling me that, 
because of an emergency in Kosovo, you want to take that money 
away from Africa.
    Mr. Kingston. Reclaiming my time, that is not what I said. 
But what I did say is that, if you want to do that, then you 
should as an administration suggest where we can reduce 
spending. If you decide to spend money in Africa and Cambodia 
and in Europe and in Korea and everywhere else, I just think 
that if it is worth American dollars being spent there then we 
ought to also say, you know, what--here is where we have 
identified areas in the bureaucracy that can be reduced in 
spending. That is a different philosophy.
    Secretary Albright. It would be great to do if we had more 
money in the first place. But, as I have said, we are in the 
process of not only robbing Peter to pay Paul, we are robbing 
Paul. There is no money.
    Mr. Kingston. And I think the American people are keenly 
aware of it, and that is what makes the question what is the 
American peril. If Americans are, you know, committed to the 
peril, if it is defined to them and they are saying we have to 
spend this money and it is worth sacrificing down the road, 
getting further in debt or spending Social Security surplus or 
whatever it is, okay, because I understand how important this 
is. And I don't think at this point that debate has taken place 
fully.
    Let me ask you this, Russian TV. One of the motivations in 
America, the humanitarian side of being there, is seeing the 
refugees. Now Russia is doing the same thing with refugees, as 
I understand it. And yet they are using it to show the American 
policy is causing the refugees, and they are using it to kind 
of motivate their people against us in a different direction. 
And maybe I am not correct about that, but can you comment on 
that? Is that--you know the refugee filming is a motivator, 
probably both ways.
    Secretary Albright. I believe, first of all, the Serbs are 
certainly using the refugee filming from their own perspective. 
I think the Russians may be, also. It happens, I think, too, 
that we have to make clear to the Russians that we also have 
abilities to influence them, but I am not here to say that 
Russian TV is objective. I think that----
    Mr. Kingston. Unlike American TV.
    Secretary Albright. Well, it depends on the subject.
    Mr. Kingston. I am sure we have some good bipartisan 
agreement on that.
    Secretary Albright. I think for us that the pictures of the 
refugees are a visible example of a horrendous policy. And I 
would maintain, as I have throughout, that we did not create 
the horror of the refugees. We were trying to prevent it. And 
we have, in fact, I think, made a very clear point that the 
kinds of things that Milosevic was planning are unacceptable. I 
believe that things would have been much worse had we waited, 
and I feel very strongly that we have done the right thing.
    Mr. Callahan. The gentleman will yield back the balance of 
his 15 minutes.
    Mr. Kingston. I have some other questions Mr. Chairman, I 
would love to submit for the record.
    Mr. Callahan. Hopefully, we will get around to a brief 
second round.
    Let me comment on one thing that you said with respect to 
the offsets. When I said I do not support offsets, that is for 
this fiscal year. Because of the efforts of the gentleman from 
Georgia and others, we have created a surplus. We also created 
a budget resolution which gave us the authority to spend that 
surplus in the event of an emergency. So it is a compliment to 
the efforts of the Congress that we have already exercised 
great compassion and great concern and fiscal responsibility in 
cutting spending for this fiscal year to its lowest possible 
level. So we did that already for this year. This money that we 
are talking about for the supplemental comes out of money we 
appropriated last September.
    So I agree with you that for the next fiscal year it will 
be a different situation. We can cut back on other activities 
but, for this year, we have to come up with monies that we have 
already appropriated. And to say that we didn't do a 
responsible job last year is wrong. We did a responsible job. 
We reduced spending. We created a surplus. The surplus is 
there. And now we are asking that we use the benefits of our 
efforts last year, thanks in great part to the gentleman from 
Georgia and some of the organizations and groups he belongs to 
insisting that we do that.
    We want to--Madam Secretary, I don't know what your 
timetable is. We know that you are busy. I would like to give 
each member an opportunity to go back just for a few minutes 
and talk about anything they want.
    But we still have not talked about your budget request. I 
will have the opportunity to discuss some of the particulars of 
your 2000 budget request at a later time.
    But we do want to give other members the opportunity to ask 
questions. But let's respect the Secretary's time as well as 
the other members' time and hold down the second round to as 
little time as possible.
    Mr. Lewis?
    Mr. Lewis. Mr. Chairman, I appreciate your yielding just 
for a moment. I am not going to take up much time.
    But the suggestion that there might be a display on Russian 
TV showing the plight of these refugees and blaming the refugee 
crisis on American policy, troubles me greatly. I would 
certainly hope that you would be discussing that directly with 
them at the highest levels, Primakov and otherwise, for if 
there is veracity to it, that portends disastrous circumstance 
in terms of our relations.
    And, Madam Secretary, one more item. During this whole 
meeting there has been so much overlap between the work I do on 
another subcommittee. I am not sure if there has been a time 
that the Secretary of State, at least when I have been here, 
has appeared before the Defense Subcommittee, but I have a mind 
to ask you as well as Secretary Cohen to come together before 
the subcommittee at some time in the near term.
    Secretary Albright. On the last point, Secretary Cohen and 
I have appeared together previously, I think, before the whole 
committee and the Senate side. I am sure we would be pleased to 
do that.
    Let me, on the other point, say that I will raise it, 
obviously; but the independent TV stations in Russia have a 
different view of this. The situation is improving. But I will 
raise it. Yes.
    Mr. Callahan. Mrs. Pelosi.
    Ms. Pelosi. Thank you, Mr. Chairman.
    Picking up on points raised by our distinguished colleague, 
the Chairman of the Defense Subcommittee, I would hope that we 
will extend an invitation to Secretary Cohen to our committee 
as well. I would like to talk to him about some of the issues 
before us and some that we didn't talk about today like 
military sales, et cetera.
    I have a couple of observations further to Mr. Lewis' 
point. I think that what we have heard here today about 
propaganda speaks to the importance of Radio Free Europe and 
Radio Liberty.
    Some of us were with Leader Gephardt in Prague last Monday 
where we met with the editorial board of Radio Free Europe and 
Radio Liberty. And given the need for information in the 
frontline states and what is happening perhaps in Russia and in 
some of the fragile democracies in Europe, I think that while 
it is another committee's jurisdiction, certainly as members of 
the full Appropriations Committee, I hope that we will 
recognize RFE/RL's importance and continuation.
    For our colleague, Mr. Wolf, who had to leave, I wanted to 
put on the table a concern he had about the Sudan. More than 2 
million people have died in the Sudan because of ethnic 
conflict. That is more than in Rwanda, Bosnia, Kosovo all 
combined. Mr. Wolf wanted to suggest that the Administration 
consider a special envoy for the Sudan.
    Just to wrap up on Kosovo, I again want to offer my 
commendations to the Administration, particularly to the 
Secretary for her courageous leadership and for her firmness. I 
want to be helpful to the Administration in any way I can.
    In that vein of friendship I want to move on to another 
subject, which is China. You mentioned the word engagement; 
and, in friendship again, I want to suggest that the President 
does a grave disservice to the issue of the U.S.-China 
relations debate when he says that he wants engagement and the 
rest of us want isolation. Nothing could be further from the 
truth, certainly for the dissidents who are aspiring in China 
for the ability to speak freely about their political and 
religious beliefs, certainly for those who have been exiled 
from China who wish to return there.
    And all of us want to see a brilliant relationship with 
China--economically, politically, diplomatically, culturally 
and otherwise. But that can only happen when there is respect 
for the Chinese people. That is why I was disappointed that 
there wasn't a stronger mention when Zhu Rongji was here about 
reversing the verdict of Tiananmen Square so we can put that 
behind us, freeing the prisoners still in prison because of 
their peaceful demonstration at the time of Tiananmen, stopping 
the harassment of those who seek to speak freely about their 
political and religious beliefs in China and honoring the 
International Covenant on Civil and Political Rights. This is 
the call that the dissidents within China have made. These are 
freedoms guaranteed by the Chinese constitution. It is not 
about us inflicting anything on them. Their own constitution 
guarantees these rights. These rights are also internationally 
recognized human rights.
    I would have hoped that the President would have associated 
himself with the aspirations of those in China who speak out 
bravely for freedom and who are arrested for doing that, even 
with the assurances that they thought they had after the 
President's visit.
    As I said, it is not about whether we engage with China or 
not. We all know that we want to engage with China and we 
should engage with China.
    It takes me now to my final point on the WTO. Certainly 
nothing would be better for the world trade regime than to have 
China finally playing by the rules. That is why it would be a 
good thing if China were willing to play by the rules, for them 
to be in the WTO. So this barrage of activity on the part of 
the business community to give China whatever it wants on the 
strength of its promises to do, this, that or the other without 
any demonstration of performance on the part of the Chinese 
makes one wonder, who are they speaking for? The Chinese regime 
or the American worker and the American people?
    Maybe when the business community gets everything it wants 
for China, it may one day speak out for human rights in China. 
We may never know because the appetite, as we know, is 
insatiable. I would certainly hope that, as this debate goes 
forth, the understanding is not to isolate, but it is also not 
to be unquestioning.
    China has not honored anything it has signed, whether it 
was promises to stop proliferating missile technology to 
Pakistan in the Bush administration where your predecessor, 
Secretary Baker, in his memoir said there was no way to get 
them to honor their word; whether it was the Memorandum of 
Understanding on intellectual property; whether it was the 
signing of the International Covenant on Civil and Political 
Rights, which they have not ratified and is certainly not 
implemented; whether it was the Memorandum of Understanding on 
the use of prison labor.
    It is not about saying they shouldn't be in. It is about, 
where is the performance to demonstrate when they come in that 
they will not wreck the WTO because they will once again refuse 
to play by the rules?
    So I hope, as this debate goes forward, we could find our 
common ground. Nothing could be more important in the 
relationship between the two countries than to have a unified 
voice between the Executive branch and the Congress about 
sustainable engagement, engagement that sustains our values of 
promoting democratic freedoms which you have described as the 
pillar of our foreign policy; of promoting our economy through 
exports, by lowering tariffs and nontariff barriers to products 
from the United States going into China, as well as promoting 
our national security by stopping the proliferation of weapons 
of mass destruction.
    So this debate is not about whether to engage or not. It is 
about what the successes of that engagement could be. I see in 
the Congress the willingness of people to work together to find 
common ground. I would hope that that would be shared by the 
White House. With that, I once again call for the President to 
speak directly to the Chinese regime about Xu Wenli and Bao 
Tong and about reversing the verdict of Tiananmen Square.
    Mr. Callahan. Madam Secretary, the staff has just informed 
me that you requested you be able to depart at 12:30. Is your 
schedule such that you can entertain additional questions or is 
it pressed?
    Secretary Albright. It is pressed. If we could make it 
brief.
    Ms. Pelosi. Mr. Chairman, I am sorry. I was just finishing, 
and I wanted to say as well that the President should be 
calling upon the regime to have conversations between the 
representative of His Holiness, the Dalai Lama, and the Chinese 
government for a resolution of the situation in Tibet.
    Secretary Albright. Could I just comment to Congresswoman 
Pelosi? You are assuming that we haven't done all of these 
things, and we have. And I agree with you.
    Ms. Pelosi. I am just concerned about the effectiveness of 
it.
    Secretary Albright. We have made very clear that there can 
never be totally normal relations with them until we work out 
these issues and also on the WTO, that it is not a favor to 
them. It has to be commercially viable, and they have to abide 
by the rules.
    I would just make one point about the business community. I 
met with some of the members of it when I was in Beijing. While 
I do not think that this is a solution, I did find it very 
interesting that American businesses there are providing an 
example to how you deal with workers in terms of a lot of their 
own programs. I think that there is a sense in the business 
community that they are American--I can't speak for all of 
them--but for some who basically see that as part of their 
responsibility.
    Mr. Callahan. Let's just try to briefly go down and ask the 
members just to respect the Secretary's time and at the same 
time, give each member an opportunity to either make a brief 1-
minute statement or a 1-minute question with a 1-minute 
response.
    Secretary Albright. I will try.
    Mr. Porter. Thank you, Mr. Chairman.
    Madam Secretary, the OSCE has put on the table a compromise 
peace proposal regarding Nagorno-Karabakh. Armenia has accepted 
that proposal. Azerbaijan has summarily rejected it and refused 
to even come to the table for further negotiations. Yet the 
administration's budget, your budget, suggests that we decrease 
aid to Armenia and increase aid to Azerbaijan. Isn't that going 
to send exactly the wrong signal? Isn't our policy there to try 
to get these two countries to come together and to negotiate 
and to resolve their differences and end the state of war that 
exists virtually between them?
    I can't understand the policy. It doesn't seem to make any 
sense to me at all.
    Secretary Albright. Well, let me just say that we have a 
high frustration level over the fact that we have not been able 
to resolve this issue. During the NATO summit next week when 
there are groupings of the EAPC, we will have members here. We 
are planning to have a meeting with the Minsk group to be able 
to put some more pressure on this.
    It is a frustrating problem. I agree with you.
    Mr. Callahan. Mr. Jackson.
    Mr. Jackson. Thank you, Mr. Chairman. This is very brief.
    Mr. Chairman, I have a number of questions for the 
Secretary regarding her budget requests and will submit them 
for the record.
    Mr. Jackson. But my last question in my 45 seconds that 
remain are really back to Kosovo. I am having a little problem, 
Madam Secretary, figuring out how we get this land back and how 
we get our boys back, because we do have three boys who are, 
unfortunately, prisoners of war in this conflict, without 
committing troops and possibly losing life.
    And so I guess as I have heard amongst many of my 
colleagues, I guess that many of us are looking for the deal, 
we want to hear what that deal is. Congressman Blagojevich put 
forward the idea that partitioning may be part of an offer to 
the Yugoslavs. I am interested, one, in whether there has been 
any such offer of a deal to the Yugoslavs so that we can put 
this process behind us. And I am also very interested in 
whether or not it is the position of the administration to 
begin some diplomatic reaching out so that we might move 
towards an end game.
    Those are my questions, Mr. Chairman.
    Secretary Albright. Briefly, President Milosevic knows that 
the diplomatic channels are open. We don't want to deal just 
for the sake of a deal because that will undermine what we are 
trying to do. But he knows that he can stop this by making 
clear that the refugees can come back, that the killing and 
violence has to stop, and that there is self-government for the 
Kosovars. Those are the terms we have talked about, and he 
knows that the diplomatic channels remain open. I don't think 
that we can make a deal just for the sake of making a deal.
    Mr. Callahan. Mr. Packard.
    Mr. Packard. Madam Secretary, I chair the Energy and Water 
Subcommittee, on Appropriations, and the Energy Department has 
requested funding to keep the Russian scientists in Russia. You 
have requested funds from this committee for the same purpose. 
Why the overlap?
    Secretary Albright. I think that we are asking for various 
parts of the program. I don't think it is an overlap. I think 
it is a different approach but I will get you an answer to 
that.
    Mr. Packard. Please do.
    Mr. Callahan. Mr. Knollenberg.
    Mr. Knollenberg. Madam Secretary, this is a budget item 
that bothers me. You and I have had conversations before about 
KEDO. With this dollar crunch, with Kosovo requiring additional 
money and dollars in short supply, the administration has asked 
for a 20 million dollars increase in KEDO. I am of the belief, 
frankly, maybe they shouldn't have anything because I have had 
some concerns about this agreement from the very beginning. I 
know you and I probably differ on that. But KEDO was designed 
before you became Secretary of State. My concern though is 
whether this is the time to reward North Korea with more money 
at the very time when they are having all of these problems 
around the world. We have given them--going back to the 
agreement which I think is flawed, light water reactors and 
fuel. We also involved South Korea and Japan. I think that you 
are right about saying that we did freeze plutonium production 
at one facility. But we didn't safeguard against construction 
of similar facilities underground. That is the part that we 
don't know about. But we do know they have the technology to 
shoot three-stage missiles in the direction of the U.S.
    Here we are five years later after the agreement was signed 
and now we are trying to dump more money into a situation that 
frankly I think has failed because we are no safer today. In 
fact, we are less safe now with respect to North Korea than we 
were five years ago. That is a tough question, but that is my 
question.
    Secretary Albright. First of all, let me say that we are 
obviously very concerned about the developments in North Korea. 
As I said in my testimony, we have asked former Secretary of 
Defense Bill Perry to do a review, and we are in the midst of 
that. At the same time I have to say that as far as I am 
concerned, the KEDO agreement, the agreed framework, is very 
useful because it has in fact frozen a portion of the plutonium 
production. This is very important. We have gained access to 
the suspicious site. And I believe that while there are serious 
concerns, we have managed as far as the nuclear aspect of this, 
to get some control over it, but not totally. I think that the 
Agreed Framework has made us safer in that regard, but I do not 
deny the fact that there are serious problems with the 
development of missile technology and suspicious sites with the 
DPRK, which is why we are doing the review.
    On the lightwater reactor itself, we have in fact developed 
a cost sharing approach on this with Japan and Korea. We have 
made no commitments to help finance the cost of the lightwater 
project. The whole issue of Korea is one that we need to spend 
a lot more time with all of you on as we go through this review 
and complete it because I can assure you that this is an issue 
of major concern to us. We spent a great deal of time on it 
already and will continue to do so, but we very much welcome 
your input.
    Mr. Knollenberg. I will submit some additional questions, 
but this is a concern that many of us share. I am not alone in 
this.
    Secretary Albright. And we share it with you.
    Mr. Knollenberg. We do want to work toward something 
constructive.
    Mr. Callahan. All Members have permission to submit 
questions for the record and in the absence of a real hearing 
on the Fiscal Year 2000 budget request, it is going to be 
imperative that you or your staff respond as expeditiously as 
possible to these written questions because that is going to 
have to take the place of the real hearing. I have many 
questions, for example, that maybe we will be able to talk 
about later, questions on North Korea, Haiti, Central America, 
Africa, debt forgiveness, which is sort of out of your purview 
but still a part of your request. The Ukraine, your comments 
about Russia. You said not to terminate Russia because of their 
involvement in this situation in Kosovo, but the question is 
not whether or not to terminate assistance to them but whether 
or not to reward them with an increase. You have requested an 
increase for Russia. We have a lot of questions that still need 
to be answered with respect to the primary reason that we 
prescheduled this hearing with you to discuss your budget.
    I appreciate you taking the time to meet with us today and 
to explain this serious situation facing us in the Balkans 
because it is important that we have the knowledge you have 
shared with us today in order that we can share it with our 
colleagues, because we are going to be trying to get 
humanitarian assistance for the refugees probably before we 
even bring your 2000 year budget request up for consideration 
on the floor. So it is an important and timely hearing today.
    We appreciate very much your time and I don't think you 
have to be reminded of my admiration for you. I think that you 
are a great lady. I think that you are well respected worldwide 
and I think that you are doing a good job. But occasionally 
people need to be questioned. I disagree with a lot of your 
policy. I disagree, as I said, with U.S. ground troops. But 
that is my right. It is also your constitutional right as part 
of the executive branch of government to not only direct 
foreign policy, but for the President to direct the military 
activities worldwide. I respect that and I am going to continue 
to do that. I am going to continue to respect you, but I am 
going to continue to respectfully occasionally disagree with 
your policies.
    Secretary Albright. Mr. Chairman, thank you very much. I 
must say that you and this committee are the best friends that 
the State Department has. I appreciate very much the 
opportunity to work with all of you. I appreciate the questions 
and I think that we had an excellent hearing. I will make sure 
that the questions are answered as rapidly as possible. If any 
of you need to speak to me on the phone on any part of this, I 
would be more than pleased to do that. I am very grateful to 
you and to the members of the subcommittee for this. Thank you.
    Mr. Callahan. We thank you.
    [Questions and answers for the record follow:]

        Questions for the Record Submitted by Chairman Callahan

                               __________
                          Rule of Law Programs
    Question. Under section 481(a)(4), the President is authorized to 
provide counternarcotics assistance Notwithstanding any other provision 
of law for a variety of purposes, including for ``other anticrime 
purposes''. Please provide a list of each instance during fiscal years 
1996, 1997, 1998, and so far in 1999 in which this waiver provision was 
exercised, including the purposes of which the funds were used; the 
amount of funds obligated; and the countries in which the programs were 
conducted.
    Answer.

              USE OF SEC. 481 ``NOTWITHSTANDING'' PROVISION
------------------------------------------------------------------------
              Country                        Program            Amount
------------------------------------------------------------------------
                           I. COUNTRY PROGRAMS

April, 1996--Guatemala.............  1996  Bilateral CN            $2.1M
                                      Program.
                                     1997  Bilateral                2.0M
                                      Program.
                                     1998  Bilateral CN             3.0M
                                      Program.
                                                            ------------
      Total........................  ......................         7.1M
Dec., 1996--Vietnam................  1996  training--demand          21K
                                      reduction.
                                     1997  training--demand          97K
                                      reduction Coast
                                      Guard, Secret Service.
                                     1998  training--demand         209K
                                      reduction DEA, Coast
                                      Guard.
                                     1999  training--demand          96K
                                      reduction FBI.
      Total........................  ......................         423K
Dec., 1996--China..................  1997  training--demand          37K
                                      reduction Secret
                                      Service.
                                     1997  contribution to          480K
                                      UNDCP.
                                     1998  training--demand         124K
                                      reduction US Customs.
                                                            ------------
      Total........................  ......................         641K
Oct., 1998--chine..................  1999 training--damand          458K
                                      reduction US Office
                                      of Govt Ethics, DEA,
                                      FBI, Coast Guard, DOJ.
                                                            ------------
      Total........................  ......................         458K

        II. PERSONAL SERVICES CONTRACTS FOR SERVICES IN THE U.S.

                                     1996  Sr. Narcotics       $103K/yr.
                                      Advisor.
                                     1996  Sr. Aviation          87K/yr.
                                      Advisor.
                                     1997  Sr. Law              107K/yr.
                                      Enforcement Policy
                                      Advisor.
                                     1998  Civilian Police       69K/yr.
                                      Program Advisor.
                                     1998  Telecommunicatio      56K/yr.
                                      ns Advisor.
                                     1998  Telecommunicatio      58K/yr.
                                      ns Advisor.
                                     1998  Anticrime             91K/yr.
                                      Program Advisor.
                                     1998  Maritime              94K/yr.
                                      Surveillance
                                      Specialist.
                                     1998  Sr. Law               30K/yr.
                                      Enforcement Training
                                      Advisor (part time).
                                     1998  International         54K/yr.
                                      Narcotics Control
                                      Strategy Report
                                      Analyst.
                                     1999  Rotary Wing           75K/yr.
                                      Standardization Pilot.
                                     1999  International         71K/yr.
                                      Law Enforcement
                                      Academy Program
                                      Officer.
                                     1999  Civilian Police       35K/yr.
                                      Program Analyst.
                                     1999  Fixed Wing            75K/yr.
                                      Standardization Pilot.
                                     1999  Maintenance Test      67K/yr.
                                      Pilot.
                                     1999  Sr. Law               39K/yr.
                                      Enforcement Training
                                      Advisor (part time).
------------------------------------------------------------------------

                          Rule of Law Programs
    Question. Has the Bureau of International Narcotics Control, or any 
other Bureau of the Department of State, transferred to, or otherwise 
obligated funds for, the Office of Inspector General for programs, 
projects, or activities in China, including any rule of law programs or 
activities? Please include funding for any person or persons that may 
have accompanied the Inspector General on any travel to China (such as 
employees of the Office of Government Ethics), and include an itinerary 
of the trip and all activities conducted during the trip.
    Answer. The Department of State has neither transferred nor 
obligated any funds to the OIG for programs, projects, or activities in 
China.
    Question. Please provide the Committee with a detailed listing of 
all anticrime programs, projects, and activities to be funded in fiscal 
year 1999 through the Bureau of International Narcotics Control, and 
those proposed for fiscal year 2000.
    Answer. Attached is a summary of INL funded training programs in FY 
1999. Program plans for FY 2000 have not as yet been identified.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                            Wye Supplemental

    Question. How do you want us to pay for Wye, Madam 
Secretary? Should we fund it:
    a. Within the current level of $5.4 billion for the Middle 
East?
    b. From funding allocated to other regions of the world?
    c. Or should it come out of the budget surplus?
    Answer. We view funding related to implementation of the 
Wye agreement as an extraordinary expense. Rather than 
requesting the funding in a one-time lump sum, it is structured 
as a supplemental request and advance appropriation for FY 99, 
00 and 01. That structure allows us to meet our commitment to 
the peace process parties, while at the same time easing the 
burden on the budget. I would also note that funding for Israel 
and the Palestinians is clearly linked to implementation of the 
Wye Agreement.
    Question. If the peace process resumes, and includes 
negotiations with Syria on the Golan Heights; negotiations with 
Israel on the removal of certain settlements in the West Bank 
or the Golan Heights; and negotiations with Israel and her 
neighbors on the resettlement of refugees; do you believe the 
United States should provide sizable additional funds to 
implement or in connection with such a peace agreement or 
agreements: Do you believe, for instance, that any peace 
agreement between Israel and Syria will include, or should 
include, Camp David-style payments to Syria.
    Answer. One of our key strategic goals is achieving a just, 
lasting an comprehensive peace between Israel and all its Arab 
neighbors, based on UN resolutions 242 and 338. Over the next 
year, the United States intends to encourage progress on the 
Israeli/Palestinian and Israeli/Syrian tracks of the Middle 
East peace process. We intend to consult closely with Congress 
on the progress of these negotiations, including any financial 
requests from the parties which might emerge as the 
negotiations move forward.

                     Support for Front Line States

    Question. What role can or should international banks play 
in the reconstruction of Kosovo in the context of an 
independent or UN protectorate status?
    Answer. It is premature to define a role for the 
international banks in a post-conflict Kosovo. Much depends on 
the political arrangements made for Kosovo and with the FRY. In 
a post-conflict Kosovo, the IFIs could play a role in 
structural reform and macroeconomic stabilization. Although 
every situation is unique, designers of any program would 
undoubtedly draw on ideas and lessons learned in similar 
economic assistance efforts in Bosnia and the West Bank/Gaza.
                   Impact on Montenegro and Macedonia
    Question. Prior to the beginning of the air campaign against 
Serbia, did we consider the political implications for the pre-Western 
governments of Montenegro and Macedonia?
    What contingency plans were made to deal with either:
    A. an attempt by the Serbian government to destabilize these 
governments;
    B. the impact of huge numbers of refugees; and
    C. a popular backlash against these governments due to the bombing 
campaign?
    In summary, has our policy had the effect of undermining the pro-
democracy, pro-Western governments of these two nations?
    Answer. NATO's successful air campaign against Serbia has 
reinforced the democratic governments in Montenegro and Macedonia and 
made clear the need to integrate the Balkans into the European 
mainstream. Milo Djukanovic continues to exercise authority as 
President of Montenegro and the Macedonian government remains strong 
and unified.
    Prior to the decision to initiate the air campaign we looked 
closely at the possible ramifications and discussed this issue in 
detail with our European Allies. Milosevic's brutal ethnic cleansing 
and deportation campaign against the Kosovar Albanian population was 
surprising only in its size and speed. The international community was 
forced to move rapidly to respond to the massive outflow of refugees 
from Kosovo. This included the provision of significant assistance to 
both Montenegro and Macedonia.
    Podogrica and Skopje rose to the challenge of handling the refugee 
crisis. Their leaders steered a consistently pro-Western course through 
a difficult period and have emerged the stronger for it.

            Questions for the Record Submitted by Mr. Porter

                               __________
                          Kosovo: Peace Terms
    Question: What is the ultimate peace agreement and final state of 
Kosovo that we are now working towards? What are our core demands from 
Milosevic to stop the bombing? Are we insisting that he accept the 
Rambouillet Accords or are we open to negotiating?
    Answer. NATO has stated clearly it will not suspend air strikes 
until Belgrade has unequivocally accepted the NATO conditions and 
demonstrably begun to withdraw its forces from Kosovo according to a 
precise and rapid timetable.
    President Milosevic knows what he must do:
    Ensure a verifiable stop to all military action and to immediate 
ending of violence and repression;
    Withdraw from Kosovo his military, police and paramilitary forces;
    Agree to the stationing in Kosovo of an international military 
presence;
    Agree to the unconditional and safe return of all refugees and 
displaced persons, and unhindered access to them by humanitarian aid 
organizations;
    Provide credible assurance of this willingness to work for the 
establishment of a political framework agreement abased on the 
Rambouillet accords.
    Our goal remains to create the conditions required for a 
sustainable peace, conditions such as military stability and the 
development of legitimate political institutions. We seek to help end 
Serb repression and give Kosovars control over their lives through 
effective self-government.
    This has become more difficult in the wake of the atrocities of the 
recent Serb offensive in Kosovo. However, our goal remains a peaceful, 
multi-ethnic and democratic Kosovo in which all its people can live in 
security and enjoy universal human rights and freedoms on an equal 
basis.
                Ally Support for Campaign Against Kosovo
    Question: Although the campaign against the Serbs is in the name of 
NATO, what is the overall feeling within the alliance? With the 
exception of Greece, are other countries in the alliance actively 
supporting the attacks?
    Answer. NATO heads of government declared unanimously at the Summit 
in Washington that NATO would not allow the campaign of terror pursued 
by the Belgrade regime under the direction of Slobodan Milosevic to 
succeed.
    The first point of the April 23 summit statement closed with the 
words, ``NATO is determined to prevail.'' Nothing has deterred Allies 
from that commitment.
    Fourteen of eighteen allies have contributed over 270 aircraft to 
the air campaign, including fighters, bombers and support aircraft. 
Nine Allies have also contributed naval assets, including aircraft 
carriers, submarines, destroyers and frigates.
                    Troops Without a Peace Agreement
    Question. At Rambouillet, I believe that there was a commitment 
made by NATO to the ethnic Albanians to provide troops to enforce a 
peace agreement. Evidently, the Albanian Kosovars were under the 
impression that ground troops would be provided regardless of a peace 
agreement. How did this misunderstanding come about? Do the Albanian 
Kosovars feel that NATO is holding up their end of the agreement?
    Answer. Neither at Rambouillet nor at any other time did the United 
States agree to send ground troops into Kosovo except in a permissive 
environment. With FRY acceptance of NATO's conditions as specified in 
UNSC Resolution 1244 and the Military-Technical Agreement between the 
Yugoslav military and NATO, the United States has begun to deploy 
troops into Kosovo as part of KFOR. Kosovar Albanian leaders appear to 
be satisfied with NATO's course of action.
                                 Kosovo
    Question. Needless to say, the NATO attacks on Kosovo have 
significantly strained our relationship with Russia. What do you see as 
the future for this relationship? In your recent discussions with Prime 
Mister Primakov and Foreign Minister Ivanov, do you still hold out 
hopes for Russia to assist in peace negotiations or are relations too 
sour at this point?
    Answer. The crisis in Kosovo has strained U.S.-Russia relations. 
However, we place a high value on this relationship and we continue to 
work intensively with the Russians on Kosovo, as well as a wide range 
of regional, international, and bilateral issues. For example, we 
worked with the Russians and other treaty members of achieve a far-
reaching Conventional Forces in Europe (CFE) agreement. We also 
recently signed a highly enriched uranium agreement and continue to 
work on issues such as non-proliferation. As I have said before, an 
effective relationship is one where we move forward together on the 
issues where we agree and manage those where we may have differences.
    When it comes to Kosovo, the Russians agree with us on the 
importance of a negotiated settlement for long-term peace and security 
in Kosovo. That is why we are working closely with the Russians both 
bilaterally and multilaterally. President Clinton has spoken with 
President Yeltsin about the matter by phone on Several occasions. The 
Deputy Secretary was just in Moscow for the second time in two weeks to 
continue the process of working with Russia to find a diplomatic 
solution to the situation in Kosovo based on the principles set out by 
the G-8.
                                 Cyprus
    Question. With Kosovo and President Milosevic's ethnic cleansing of 
the Kosovars being in the forefront of the discussions here today, I am 
curious about the effect this situation will have on U.S. policy in 
other parts of the world were similar atrocities are occurring. 
Specifically, I am interested in Turkey and their persecution of the 
Kurds and their occupation of and colonization of Cyprus in violation 
of international law. In the aftermath of Turkey's invasion of Cyprus 
in 1974, one-third of the island's population became refugees, somewhat 
similar to what is occurring in Kosovo. Yet Turkey has gone unpunished 
for these actions. When is the administration going to seriously 
address the reunification of Cyprus and the end of the Turkish military 
occupation of this island?
    Answer. Serb ethnic cleansing of Kosovar Albanians, the status of 
Kirds in Turkey, and the Cyprus dispute are not comparable situations.
    Finding a political solution to the division of Cyprus that 
addresses the concerns of both sides remains a high priority for this 
Administration. We are working hard to bring the two sides into 
comprehensive settlement negotiations under U.S. auspices. The U.S. 
remains committed to a solution on the basis of a bizonal, bicommunal 
federation.
    With respect to the status of Turkey's Kurds, we have said for many 
years that we do not believe there is any purely military solution to 
Kurdish issues in Turkey. Any enduring solution lies in the expansion 
of democracy, including full democratic political participation by all 
of Turkey's citizens and protection of their human rights.
                  Palestinians Meeting Wye Commitments
    Question. The State Department spokesman and others have said on 
several occasions that the Palestinian Authority is in compliance with 
many of the commitments it entered into at Wye. I have some specific 
questions about the commitments under Wye that have met (sic) How have 
the Palestinians worked to end terrorism in Gaza and the West Bank? 
Have they outlawed all organizations of a military, terrorist or 
violent character? In terms of bringing an end to incitement, have the 
Palestinians ceased teaching children about hate and violence. Have 
sermons in mosques attacking both Israel and the U.S. been stopped?
    Answer. We believe the Palestinian security organizations are 
making a very serious and credible effort to combat terror.
    For example, acting on information developed through their own 
investigations, PA security forces have prevented a number of terror 
operations, including what could have a very serious attack in Tel Aviv 
in March. The Israeli government commended this PA security operation 
and others.
    On the question of outlawing terrorist organizations, the Wye River 
Memorandum obligated the Palestinian side to ``inform the U.S. fully of 
the actions it has taken to outlaw all organizations (or wings of 
organizations, as appropriate) of a military, terrorist or violent 
character.* * * ''
    The Palestinians have provided to us a March 3, 1996 statement 
issued by the Palestinian Authority stating that a meeting of the 
Higher Palestinian National Security Council, chaired by Chairman 
Arafat, had decided to ban the activity of all paramilitary groups, 
including the armed wings of HAMAS and the Palestinian Islamic Jihad. 
We have some questions regarding the legal status of this statement. We 
are discussing this with the Palestinians.
    The Palestinian security services have been effective in taking 
action against those terrorist groups.
    We continue to press the PA to do everything possible to prevent 
terror and to cooperate fully with the Israelis.
    Regarding incitement in Palestinian textbooks, a recent study did 
reveal some anti-Semitic content. Obviously, there can be no place for 
such material.
    We have raised our strong concerns directly with Chairman Arafat 
and the PA, which is in the process of creating new textbooks to 
replace those published prior to the advent of the PA. We will continue 
to pursue this issue with the PA. This problem has also been raised in 
the Anti-Incitement Committee.
                                  Iran
    Question. While some improvements in Iran have taken place, many 
problems still remain. I am concerned that the Administration gestures 
towards improving relations with Iran could be very premature. To 
better assess the current situation in Iran, I have a few questions. 
Does it appear that President Khatami is in control and if so, does he 
participate in security-related decision making? Are you aware of the 
amount of assistance Iran is currently providing to Hamas and 
Hezbollah?
    Answer. President Khatami exercises authority over much of the 
Iranian government, but is outranked by Supreme Leader Khamanei on 
issues involving the Iranian armed forces, the Revolutionary Guards, 
the Judiciary and the Ministry of Intelligence. In addition, powerful 
foundations called ``bonyads,'' which control the holdings of the 
former Shah and figures associated with his regime, report directly to 
the Supreme Leader, and not President Khatami. The bonyads exercise a 
significant impact on Iranian economic activity.
    Khatami's election two years ago alarmed conservative elements in 
Iran. As Khatami has pressed for change in both domestic and foreign 
affairs, these conservatives have resisted. The outcome of this 
struggle will depend in great part on the evolving power relationships 
among Khatami, Supreme Leader Khamanei and Expediency Head (and ex-
president) Rafsanjani.
    The Iranian public apparently supports Khatami and his agenda of 
promoting the rule of law, reducing government intrusion into people's 
lives, and increasing freedom of expression.
    With regard to Iran's support for Hamas and Hizboliah, I would cite 
the State Department's ``Patterns of Global Terrorism'' report for 
1998, released April 1999:
    ``Iran continued to provide support to a variety of terrorist 
groups, including the Lebanese Hizballah, HAMAS, and the Palestinian 
Islamic Jihad, which oppose the Middle East peace process through 
violence. Iran supports these groups with varying amounts of training, 
money, and/or weapons.''
    Question. We have seen for some time Iranian development of 
advanced missiles such as the Shahab 3 designed to threaten U.S. forces 
and allies in the Middle East. We also have seen significant signs of 
an Iranian effort to develop a nuclear weapons program. What is your 
assessment of Iranian progress in the missile and nuclear arenas? What 
action are we undertaking to address these developments?
    Answer. Iran continues its efforts to develop a nuclear weapons 
capability, but has made little progress to date due to the reluctance 
of most nuclear suppliers to provide any assistance to Iran. It also is 
pursuing a multi-track effort to develop both liquid and solid 
propellant missile systems and is aggressively seeking equipment and 
technology from foreign sources for these programs. Iran has made 
significant progress in the last few years toward its goal of becoming 
self-sufficient in ballistic missile production, as demonstrated by its 
indigenous productions of Scud missiles and the July 1998 flight test 
of the Shahab-3 medium-range ballistic missile.
    We strongly oppose any cooperation with Iran's nuclear and missile 
programs, and have engaged for many years in aggressive efforts to stop 
the proliferation of nuclear and missile technology to Iran, including 
through the imposition of sanctions. During the past five years, we 
have worked multilaterally, through the Nuclear Suppliers Group (NSG) 
and the Missile Technology Control Regime (MTCR), and bilaterally 
through discussions with supplier governments, to restrict their 
missile and WMD-related exports and cut off sources of outside supply 
to Iran's missile and nuclear programs. We have held four rounds of 
talks with North Korea to convince it to restrain its missile 
technology exports, and we are pursuing an intensive high-level effort 
to impede Iranian efforts to obtain missile and nuclear technology from 
Russian firms. In addition, we continue to engage China in extensive 
nonproliferation discussions, and raised our concerns about Chinese 
cooperation with Iran at the highest levels. We also continue to press 
China to bring its export policies and practices better in line with 
international standards.
    These efforts have produced results. Over the past year, Russia has 
put in place new legal authorities to control the export of any item 
destined for a program of proliferation concern, has stopped several 
activities of concern, and has investigated others, including reports 
of Russian firms cooperating with Iran. China has pledged not to assist 
unsafguarded nuclear facilities, to phase out its nuclear cooperation 
with Iran, and not to export MTCR-class ground-to-ground missiles. 
China also has announced that it is studying the possibility of joining 
the MTCR and has stated that it would not sell missiles to Iran.
    The Administration also uses sanctions and other tools to combat 
proliferation. During the past year, the USG imposed penalties on ten 
Russian entities. In January, the Administration imposed administrative 
measures against three Russian entities for their nuclear- and missile-
related cooperation with Iran. Last July, we took the same action 
against seven Russian entities involved with Iran's ballistic missile 
program. And in 1992 and 1996, we imposed missile sanctions on North 
Korea for selling missile technology to Iran.
                          Idonesian Elections
    Question. Is the U.S. Government planning to fund observer missions 
by the Carter Center or any other U.S. entities for the Indonesian 
elections? If so, what type of observer mission do you foresee and what 
will be the funding mechanis
    Answer. The U.S. Government is funding a joint Carter Center/
National Democratic Institute (NDI) delegation to observe the 
Indonesian elections through a grant to NDI. The delegation will not be 
official, but will play an important role--along with delegations from 
many other nations and the people of Indonesia themselves--in assessing 
the fairness of the ballot. NSAID has approved an NDI grant of $750,000 
to form the 80-member delegation, which will be led by former President 
Carter and a prominent Republican, and possibly include several members 
of Congress.
    Question. These elections, while important, are a single point on a 
long continuum in the democratic development that will need to take 
place at multiple levels in Indonesia in the coming years. What will be 
the focus of our democracy and governance programs in Indonesia in 
FY2000 and beyond?
    Answer. We have emphasized that these elections are a necessary, 
but not sufficient condition for democracy to take hold in Indonesia. 
They are a first step in what will be a prolonged democratization 
process.
    Though the elections have become the focus of much attention in 
recent months, the U.S. Government has been actively supporting 
Indonesian efforts to improve governance and strengthen civil society 
efforts for some time. These efforts will continue and expand under our 
``Emerging Democracies'' initiative, which is designed to focus 
attention on Indonesia's democratization over the coming years.
    In particular, we plan to continue our support for Indonesian 
private sector and government efforts to foster Institutional reform 
and constructive change, while also supporting development of a Non-
governmental organizations and the media.
    Question. Given the history of U.S. training for the Indonesian 
military, there is understandable concern about the future of this 
issue and the future of military to military relationships in 
Indonesia. How does the proposed police training program fit into our 
goals in Indonesia and how has it been designed to deal with the 
suspicion that has come to be attached with any effort to provide this 
kind of training in Indonesia?
    Answer. The administration has moved quickly to support Indonesia's 
democratic transition, focusing most of our assistance on activities 
relating to the elections and the strengthening of civil society. 
However, we also recognized that violent, potentially lethal 
demonstrations like those that led to Soeharto's ouster last May and 
that accompanied the convening of the parliament in November could 
undermine the country's democratic transition. We have proposed 
training Indonesian police leaders in non-confrontational crowd control 
tactics in an effort to help Indonesia reduce such violence and better 
ensure a peaceful democratic transition.
    The training program has been designed to help police managers 
counter the overtly confrontational crowd-control tactics that have 
brought justifiable criticism and suspicion upon the Indonesian 
security forces. It will focus on teaching police leaders modern, non-
frontational crowd management tactics and techniques and improving 
police-community communication. We believe it has real, if modest, 
potential to reduce violence, protect lives, and help ensure a peaceful 
democratic transition.
    On April 1 the police separated from the Indonesian military 
structure in an initial step toward a fully independent status. This 
training will target police leaders only, not the military. For this 
reason, it also represents an opportunity to provide early 
institutional support for the Indonesian police as an organizational 
entity separate from the military.
              Burma Democracy and Humanitarian Assistance:
    Question. To what can you attribute the continued delay in 
processing what should by now be a pro forma request for proposals for 
the support of the Burmese democratic opposition?
    Answer. We want to ensure that USG funds are being put to optimal 
use to pursue our policy goals. Because the political, economic and 
humanitarian situation in and around Burma does not remain static, we 
are very careful to have a serious and thorough process each year.
    We consider it necessary that all nongovernmental organizations 
(NGOs) submit formal applications describing their prospective 
activities for an interagency committee review (DOS, USAID, USIA), even 
if they have qualified for USG funding in the past. The reviews are 
completed as expeditiously as possible.
    We consult regularly with the democratic opposition regarding 
current and potential uses of earmark funds. Kyi and other leaders of 
the democratic opposition prior to issuing this year's request for 
applications. As soon as the interagency committee's tentative funding 
determinations are made, these will be conveyed to the democratic 
opposition leaders for comment, and then finalized. While these 
consultations have added additional steps to the grant-making process 
this year, they are necessary in order to ensure that the funding is 
appropriately targeted to help us accomplish our goals in Burma.
    We will make final funding decisions on the FY 99 funds by mid-
summer.
    Question. What is the position of the Department with regard to the 
use of these (appropriation) funds for development projects within 
Burma?
    Answer. The U.S. Embassy in Rangoon is in close contact with Aung 
San Suu Kyi and has discussed the issue of humanitarian assistance to 
Burma with her many times. She has indicated that she supports 
humanitarian assistance in principle and would projects in Burma that 
could be closely monitored to ensure that they function without 
interference by the authorities and that assistance is delivered on a 
non-discriminatory basis.
    We share Aung San Suu Kyi's belief that judicious use of assistance 
funds in Burma could advance prospects for democracy there.
                                Colombia
    Question. I understand that Assistant Secretary of State for 
Democracy, Human Rights and Labor, Harold Koh, recently visited 
Colombia. What steps is the United States taking to pressure the 
Colombian government to protect individuals working to protect the 
environment and defend human rights, who operate under constant death 
threats?
    Answer. The threat to human rights activists in Colombia is well 
documented. We noted this concern in our annual Country Reports on 
Human Rights Practices for 1998, while the non-governmental 
organization Human Rights Watch recently reported that more human 
rights defenders were killed in Colombia than in any other country in 
1998. In addition to those killed, many more have been threatened, and 
some have fled the country.
    Due to the high level of violence in Colombia and the long-running 
internal conflict, the Department of State has advised Americans not to 
travel there. Guerrillas and paramilitaries have targeted and killed 
non-combatants, including human right defenders, for years. The recent 
murder by FARC guerrillas of three Americans working with an indigenous 
group on environmental issues underscores the dangers posed by the 
ongoing conflict. There is no quick or easy solution to the very 
complex problems confronting the government of Colombia.
    Protecting human rights defenders is a high priority of the U.S. 
government, which we demonstrated by our strong support for a 
resolution on human rights defenders at the United Nations Human Rights 
Commission in Geneva in 1998.
    Assistant Secretary Koh has raised our concern about the plight of 
human rights defenders regularly in meetings with Colombian officials, 
including Vice President Bell, who is in charge of the Colombian 
government's efforts to improve its human rights record. On his trip to 
Colombia in March, Assistant Secretary Koh highlighted the need for the 
government of Colombia to do more to protect human rights defenders in 
a speech he gave at a human rights conference in Medellin. He also 
raised the topic with President Pastrana during that trip, and met with 
human rights leaders to hear their concerns first hand and show our 
support for their efforts.
    The highest officials of the government of Colombia, including 
President Pastrana, have stated their commitment to improve the human 
rights climate in Colombia, and to pay special attention to improving 
security for human rights defenders. The government is implementing a 
plan to increase security at the offices of the most threatened human 
rights organizations, and to enhance the personal security of 
individuals specifically threatened.
    We support those measures and will continue to monitor the 
situation closely.
    Question. Providing counter-narcotics assistance and training to a 
military unit operating in the area of intense fighting could put the 
U.S. in the position of becoming further involved in this intractable 
conflict. How do you intend to keep our counternarcotics assistance 
from becoming counter-insurgency assistance?
    Answer. Colombian military participation in counternarcotics law 
enforcement operations is necessitated by the nexus between heavily-
armed insurgents and narcotics traffickers. USG counternarcotics 
assistance to the Colombian military will be closely monitored by the 
U.S. Embassy to ensure its use for counternarcotics purposes. We are 
working closely with the Colombian military to designate specific units 
to be used only for counternarcotics operations.

           Questions for the Record Submitted by Mr. Packard

                               __________
                         Kosovo: Arming the KLA
    Question. There are some here in Congress that are advocating that 
we arm the Kosovo Liberation Army (KLA). It would seem logical to me 
that arming the Kosovo Albanians so that they can defend themselves is 
a better alternative than sending in American ground troops to do it 
for them. Do we have any plans to arm them? Would this be a good idea?
    Answer. There is no military solution for either side to the Kosovo 
conflict. Arming the KLA would be a violation of the UN arms embargo in 
effect against Serbia, and we believe it is imperative to respect these 
UNSC resolutions.
    Moreover, if we arm the KLA in defiance of the UNSCR, others may 
consider themselves justified in arming Serbian forces.
    NATO's military actions against Serb forces are the most effective 
way of degrading and ultimately defeating Belgrade's plan for ethnic 
cleansing of Kosovo. Outside arms supplied to the KLA could detract 
from that effort by making refugees and IDPs more vulnerable to Serb 
attack.
                             Kosovo/Russia
    Question. How far do you think Russia will go on supporting the 
Serbs? Is it a possibility that they may become militarily involved as 
well if we continue our intervention on Yugoslavia?
    Answer. President Yeltsin has repeatedly stated, both publicly and 
privately, that Russia will not become militarily involved in the 
Kosovo conflict. In fact, Russia continues to engage actively with us 
in an attempt to find a diplomatic solution to the situation in Kosovo 
based on the principles put forth by the G-8 in Bonn.
    Russia is supplying humanitarian assistance to Yugoslavia. 
Emergency Minister Shoygu has pledged that this aid is for all refugees 
regardless of ethnicity or nationality.
                                 Kosovo
    Question. Can you provide us with an update on our efforts in 
regard to the refugee situation? Are there still plans for the United 
States to accept some of these refugees?
    Answer. Funding. Since March 1998, the U.S. has provided over $188 
million in Kosovo-related assistance: nearly $60 million from State/
PRM, $80 million from USAID, and $48 million from the Defense 
Department. Much of our funding has been funneled through international 
organizations such as the UNHCR and IOM, where it has a multiplier 
effect, and is implemented by U.S.-based non-governmental 
organizations.
    Camp Hope. The U.S. military assigned in Albania has contracted for 
the construction of camps for Kosovar refugees, beginning with Camp 
Hope, near the coastal town of Fier, which will ultimately have a 
capacity of 20,000. Camp Hope began accepting refugees on May 13. U.S. 
construction of at least two additional camps is under consideration.
    Refugees to U.S. on April 21, the administration announced the U.S. 
plan to admit up to 20,000 Kosovar Albanians to the U.S. as refugees. 
The first priority of the program is to relieve the pressure on the 
Government of Macedonia by moving refugees from FYROM. The program 
consists of two tracks: one that will reunite families in Macedonia 
directly with relatives in the U.S. and a second that will move 
refugees out of vulnerable situations in refugee camps. We are prepared 
to reunite relatives with refugee families in Albania as well. Our 
first priority, however, is to relieve the pressure on Macedonia.
    Question. What type of humanitarian assistance are we providing to 
the refugees? Do you have a cost estimate at this time of the 
humanitarian assistance that has been provided thus far?
    Answer. Funding. Since March 1998, the U.S. has provided over $188 
million in Kosovo-related assistance: nearly $60 million from State/
PRM, $80 million from USAID, and $48 million from the Defense 
Department. Much of our funding has been funneled through international 
organizations such as the UNHCR and IOM, where it has a multiplier 
effect, and is implemented by U.S.-based non-governmental 
organizations.
    Macedonia. The most pressing of the myriad problems in the Kosovo 
crisis is to move people out of Macedonia. The total number of refugees 
in Macedonia is over 230,000, more than ten percent of the country's 
population. The USG has begun providing refuge in the U.S. to up to 
20,000 Kosovar refugees. Preference is being given to refugees with 
relatives in the U.S., to vulnerable populations, and to those in 
Macedonia.
    Albania. The U.S. military assigned in Albania has contracted for 
the construction of camps for Kosovar refugees, beginning with Camp 
Hope, near the coastal town of Fier, which will ultimately have a 
capacity of 20,000. Camp Hope began accepting refugees on May 13. U.S. 
construction of at least two additional camps is under consideration. 
Whereas in Macedonia the political optics are uppermost, in Albania the 
constraining factor in refugee capacity is the country's antiquated 
infrastructure. UNHCR has begun providing cash payments to the host 
families in Albania that have been gracious enough to take Kosovars 
into their homes. New refugees are entering Albania from Kosovo and 
Montenegro. Albania now has over 430,000 Kosovar refugees.
                               Russia/IMF
    Question. Russia is interested in obtaining yet another loan from 
the International Monetary Fund (IMF). I have deep concerns about this 
considering earlier press reports that a lot of money from a previous 
IMF loan ended up in a Swiss bank. What type of oversight do we have in 
making sure our assistance is used for its intended purposes?
    Answer. As a precondition of the IMF program currently under 
discussion, the Russian Office of the Prosecutor General must provide 
the Managing Director of the IMF with a written legal opinion on the 
handling of the IMF tranche disbursed in July 1998. The accounting firm 
of PricewaterhouseCoopers is also participating in the investigation of 
this disbursement as part of its audit of the Russian Central Bank.
    IMF Board approval of disbursements is contingent on Russia's 
implementation of a range of measures, including ones aimed at 
increasing government revenues and restructuring the banking system. In 
response to our repeated insistence on transparency in the management 
of these funds, Russia agreed that disbursements would be made in the 
form of Special Drawing Rights (SDRs) rather than dollars. These funds 
would be held in an SDR account at the IMF for the purpose of making 
payments on its obligations to the Fund as they come due.
                       U.S. Assistance to Ukraine
    Question. The Administration has requested an increase in FY 2000 
aid to Ukraine. In the past, this committee has pushed them to enact 
economic reforms. American business people have testified that 
corruption is rampant, and they themselves have been the victims of 
this corruption, which makes it difficult for them to do business 
there. Is this increase justified and are you convinced that Ukraine 
has made some progress in this area?
    Answer. I share your concern about Ukraine. The truth is that its 
transition is not easy and will take a long time. We have made a long-
term commitment to assist Ukraine in this process. I dealt with these 
issues, including Ukraine's difficult business climate, in a Report to 
Congress on February 18, 1999. I certified then that Ukraine has made 
``continued progress'' with respect to the resolution of U.S. investor 
complaints.
    Our focus on helping Ukraine meet the challenge of transition 
obscures the fact that hundreds of U.S. and other foreign companies are 
active in Ukraine. We have worked hard with Ukraine's government to 
resolve U.S. investor complaints. These are thorny issues typical of 
many economies in transition. But we have seen progress this year, 
particularly in GOU efforts to address a range of systemic problems 
which impede both foreign and domestic investment.
    We are asking for more money for Ukraine because of its importance 
to our interests, because it needs our help, and because we can and 
should do more in Ukraine especially at the grassroots level. We will 
focus on the nascent NGO community, independent media, and municipal 
and regional governments, where by working with progressive local 
leaders we can make sure that our help works in support of Ukraine's 
democratic and market development.

         Questions for the Record Submitted by Mr. Knollenberg

                               __________
                  Kosovo and U.S. Assistance to Russia
    Question. Given the current state of affairs, do you foresee the 
Administration taking any action affecting the U.S. foreign assistance 
program in Russia? If Russia were to enter this conflict on behalf of 
Yugoslavia, what action, if any, would the Administration take 
regarding future U.S. assistance programs in Russia?
    Answer. Assistance to Russia continues to be in the national 
interest of the United States. It is important that the USG continue to 
support security and democracy building efforts in Russia. This 
includes U.S. assistance in the areas of security (threat reduction, 
nuclear safety and export control activities); humanitarian aid (food 
aid, orphanages, combating TB and HIV); democracy and civil society 
(independent media, law enforcement, exchanges); and other grassroots 
programs that support small business and NGO development.
    We are working through the G-8 process with Russia to seek 
resolution of the Kosovo conflict. President Yeltsin has stated 
repeatedly that Russia will not be drawn militarily into the conflict 
with the FRY.
                                 Kosovo
    Question. Initiation of NATO's Operation Allied Force significantly 
accelerated the inevitable large movement of refugees from the war 
zone. As the State Department planned for the fall-out of this 
operation what were your estimates of population migration, and what 
were your expected resource requirements to aid the refugees? What 
period of time did your estimates assume would require sustained 
support to refugees?
    Answer. While we expect that there would be some population 
movement out of Kosovo based on Serbian military repression, we did not 
anticipate the pace and scale--and above all the Yugoslav 
determination--of the most systematic ethnic cleansing seen in Europe 
since the Second World War.
    Even aid agencies did not predict that there would be ethnic 
Albanians herded on trains and dumped at the Macedonia border.
    We were prepared and had in place in the region enough personnel, 
food, and logistical support for 400,000 people for six months. 
International Organizations such as the UN High Commissioner for 
Refugees (UNHCR), in coordination with numerous non-governmental 
organizations (NGOs) both international and local, such as the Mother 
Theresa Society, were doing an excellent job of assisting the hundreds 
of thousands of people Milosevic had displaced internally.
    Frankly, the international aid community does not pre-position food 
for every potential outflow, but rather is prepared to respond 
throughout the world, very quickly. That is what was done.
    In addition, that much food and that many supplies would have been 
seen as some kind of magnet--a pull factor.
    We couldn't have gotten the political, financial, or logistical 
support for that kind of operation. A crisis of this proportion 
mobilizes the entire world--but unfortunately, that doesn't happen 
until the crisis is at hand.
                           Caspian Oil Basin
    Question. Does the Administration deem it necessary to adjust its 
policy toward the Caspian, in order to adequately reflect the current 
reality and broader U.S. interests?
    Answer. U.S. energy policy in the Caucasus and Central Asia aims to 
develop a network of multiple pipelines and an east-west energy transit 
corridor in pursuit of four key objectives: Fostering the independence, 
prosperity and stability of the new states of the Caspian region; 
Establishing economic linkages between these new states to mitigate 
regional conflicts, foster their integration into the global economy, 
and encourage their evolution toward market-based democracies; 
Bolstering global energy security by ensuring the free flow of Caspian 
energy resources to world markets; and Enhancing commercial 
opportunities for companies from the United States.
    Realization of an east-west corridor of multiple pipelines is 
moving ahead at a healthy pace. Two ``early oil'' pipelines are now in 
place to carry oil from the Caspian to Black Sea ports; the Caspian 
Pipeline Consortium (or CPC) broke ground on May 12 for its project to 
transport oil from Kazakhstan to the Black Sea; and efforts to promote 
trans-Caspian, trans-Caucasus pipelines for oil and gas are succeeding 
because, among other reasons, the oil and gas companies recognize the 
long-term importance of these routes.

           Questions for the Record Submitted by Mr. Kingston

                               __________
                                 Kosovo
    Question. As you know, the four elements of National Power include 
Diplomatic, Informational, Military, and Economic strategies, and the 
conduct of Foreign Policy and National Security policy must carefully 
employ these assets, fully understanding that the most costly in 
resources and lives is the use of Military Power and should thus be 
used as a last resort. Do you believe that we fully exhausted employing 
the other three elements before we engaged military power to solve our 
dispute with President Milosevic? How were these elements employed?
    Answer. Yes, I believe that we fully exhausted the other three 
elements before we engaged military power. As you will recall, for 
nearly an entire year before the start of the air campaign, Ambassador 
Chris Hill had been engaged in an intensive shuttle diplomacy in the 
region. He and his EU and Russian counterparts were backed up 
diplomatically by the U.S., UK, France, Germany, Italy, and Russia (the 
Contact Group), as well as NATO, the European Union, the OSCE and other 
organizations.
    We employed a host of non-military methods before resorting in the 
final instance to military action. The U.S. and EU imposed an arms 
embargo, but also imposed an investment ban and assets freeze, as well 
as a visa ban. In addition, ``outer wall'' sanctions (denial of 
membership in international organizations and access to international 
financial institutions, or IFIs) remained in effect and were partially 
used as leverage with the Federal Republic of Yugoslavia (FRY) on 
Kosovo. Public diplomacy by the U.S. and others made clear to the Serbs 
and to neighboring states Belgrade's responsibility for atrocities and 
repression against civilians, and that international patience was 
running out, as well as the ruin and isolation that the policies of the 
Milosevic regime were bringing on the people of the FRY. The strong 
support NATO has received from all of the FRY's neighbors is proof 
positive that these efforts worked.
    When last year Belgrade began its brutal repression of ethnic 
Albanian civilians in Kosovo, we led other concerned countries to pass 
United Nations Security Council Resolution (UNSCR) 1160 calling upon 
the parties to settle the crisis peacefully and imposing an arms 
embargo. As the crisis deepened, we worked with our Contact Group 
partners to gain Belgrade's acceptance of a Kosovo Diplomatic Observer 
Mission (KDOM). Despite continued diplomacy by Hill and others, by 
September it had become clear that, if the Serbs continued their reign 
of terror in Kosovo, a humanitarian catastrophe would occur as winter 
set in. Tens of thousands of Kosovars were living in the open, while 
many more thousands had been displaced from their homes.
    Reflecting international anxiety over the situation, we again led 
the effort to obtain a UNSC resolution, 1199, which set a standard of 
compliance for Belgrade to avert violence and a potential humanitarian 
catastrophe. We and our NATO Allies were especially worried about the 
deteriorating situation and at the North Atlantic Council voted to 
approve taking military action if no other course was possible. In 
October, Special Envoy Richard Holbrooke, backed by the military power 
of NATO, was able to convince President Milosevic to accept the 
international community's terms. This paved the way for agreements with 
NATO and the Organization for Security and Cooperation in Europe (OSCE) 
for air and ground verification missions, AVM and KVM, respectively. 
Once Generals Clark and Naumann laid down the terms for the withdrawal 
of Serb forces from Kosovo, KDOM was on the ground to verify the 
withdrawals. AVM and KVM were endorsed by the UN Security Council in 
resolution 1203.
    As part of the Holbrooke-Milosevic agreement, Belgrade agreed to 
pursue a political solution to the Kosovo crisis. Chris Hill 
reinvigorated his shuttle diplomacy, presenting draft after draft of 
proposed texts to both sides. Meanwhile, OSCE's KVM reported increasing 
noncompliance with the October agreements.
    Following the massacre of 45 unarmed civilians in the village of 
Racak on January 15, 1999 (later proven by a Finnish forensics team), 
it became apparent that Serbs were stalling on the diplomatic front in 
order to resume their repression. The Contact Group agreed to attempt 
to short-circuit the Serbs' bad faith in the negotiations by convening 
the parties for intensive discussions at Rambouillet on the basis of 
proposed texts which met all previously agreed principles. We made 
clear along with our NATO allies that failure to respond positively 
would have serious consequences. Belgrade responded and appeared at the 
Rambouillet talks.
    The Serbs' perfidy at Rambouillet is a matter of record. They 
dragged out the negotiations and refused to engage on key substantive 
issues, all the while building up a massive force in and around Kosovo 
with which they intended to ethnically cleanse the province of ethnic 
Albanians. The Kosovar delegation accepted ad referendum the 
Rambouillet accords. The Serbs, however, only agreed to the political 
aspects. When the parties met several weeks later in Paris, the Serbs 
walked back even on what they had previously agreed.
    Despite intense diplomatic pressure from the Contact Group, a 
military threat from NATO, last minute visits by high-level diplomats, 
and his own repeated promises to seek a political solution, Milosevic 
persisted in seeking to use force to repress and terrorize Kosovo's 
civilian population. By the time NATO began its air campaign, the Serbs 
had been engaged for months in the advance stages of their plan to rid 
Kosovo of its Albanian residents, including a return to shelling of 
villages, summary executions, beatings, systematic looting, robbing, 
extortion, and terror. Their actions had displaced tens of thousands of 
Kosovar Albanians and had created such a dangerous environment 
throughout the province that the OSCE KVM had to withdraw for its own 
safety.
    Question. The Washington Post reported ``Clinton administration 
officials have expressed concern that any move to constitute an 
alliance invasion force would trigger a divisive debate that could 
undercut support here and in Europe for the air operation.'' (NATO 
Forces Staging, But Not For Invasion, 4/9/99) One of the 
administration's stated ``important interests at stake in the Kosovo 
conflict (includes) maintaining the credibility of NATO as guarantor of 
peace and stability in Europe'' (White House, Information Regarding the 
US/NATO Action in Kosovo, 4/9/99). Although the campaign against the 
Serbs is in the name of NATO, what is the overall feeling within the 
alliance? With the exception of Greece, are other countries in the 
alliance actively supporting the attacks?
    If NATO is unable to unite behind a resolution to use all means of 
force to meet their objectives and end this war with Yugoslavia, will 
it's credibility not be lost?
    Weren't these contingencies negotiated with our allies and planned 
for in advance--before the commitment of force?
    Answer. NATO's credibility is at stake. But nothing has deterred 
NATO's commitment to the unanimous declaration by NATO heads of 
government at the Washington Summit that NATO would not allow the 
campaign of terror pursued by the Belgrade regime under the direction 
of Slobodan Milosevic to succeed.
    NATO is determined to stop the humanitarian crisis, bring long-term 
stability to Southeastern Europe, and defend the values for which the 
Alliance has stood since its foundation: democracy, human rights, rule 
of law.
    We and Allies closely considered all options before selecting the 
current course of action and continue to monitor progress and evaluate 
alternatives to ensure the mission is accomplished. We expect the air 
campaign to achieve NATO objectives.
    Question. The long slow escalation of the War in Vietnam, and the 
restraints imposed on the military by the U.S. administration in the 
1960s and 1970s cost our country dearly in American lives and in 
resources. Does your budget reflect the potential costs associated with 
the current war over Yugoslavia and what is the Foreign Policy and 
National Security Strategy you will implement to avoid similar costs in 
this escalating conflict with Yugoslavia?
    Answer. I can only comment on the non-military aspects of the 
budget, but I believe our budget takes into consideration most 
potential costs associated with the current war over Yugoslavia. Our 
Allies and we are convinced that the air campaign will be successful, 
(delete) and that subsequent events will show this to be true. Those 
actual and anticipated costs are expected to be covered by the 
requested supplemental, as well as most of our share of the costs in 
providing humanitarian and other support to countries in the region 
through the end of the current fiscal year.
    Once the conflict is over, there will be a large reconstruction 
task in Kosovo. While we should pay our fair share, the Europeans have 
agreed that they will be responsible for the vast majority of it. Once 
we have a better sense of the damage, however, we may need additional 
funds to meet our share of KFOR, provisional administration, 
humanitarian relief, war crimes prosecutions, and reconstruction costs 
for Kosovo and administrative overhead for the USG civilian agencies 
involved.
                   Kosovo: Diplomacy Backed by Force
    Question. I agree with your piece in Foreign Affairs last year 
saying that U.S. diplomacy requires not only vision and anticipation, 
but also the spine to honor our commitments and back our words with 
actions. If our earlier threats of lower-intensity force had been 
exercised when our conditions or deadlines were not met, I believe our 
coercion of Milosevic would have been more effective. Possibly avoiding 
today's all out war. Am I wrong?
    Answer. Diplomatic engagement backed by the credible threat of 
force is the most realistic formula for stabilizing the Balkans and 
protecting United States interests in that region. That is the formula 
we used to end the war in Bosnia and Herzegovina, and that is the 
approach used in pursuing a diplomatic solution to the crisis in 
Kosovo.
    I agree that in order for the threat of force to be credible, it 
must be backed by determination and commitment. That is why we have 
clearly spelled out for Milosevic what actions he must take and the 
consequences for failing to meet them. When he failed to accept the 
Rambouillet Accords, NATO had no choice but to follow through on its 
threat to take military action.
        Kosovo: National Interests and the Use of Ground Troops
    Question: Did your strategy for a recommendation to commit American 
forces into the conflict with Yugoslavia include a conscious decision 
that we would have to use all means possible to achieve a favorable 
outcome and the realization that winning this war could mean a 
commitment of overwhelming force, including the use of a large ground 
force to win? Is not such an assessment essential to fully evaluate if 
this is a vital national interest before committing military power 
under any circumstances?
    Answer. NATO is unified in its determination to resolve the 
conflict in Kosovo based on its five conditions, including the 
requirement for an international military presence.
    NATO is currently updating its plans for KFOR, which would enter 
Kosovo after a suspension of NATO air strikes and the withdrawal of 
Serb military, police and paramilitary forces.
    This is a prudent step and does not constitute a change in policy.
    NATO's strategy is aimed at disrupting and crippling the assets 
Milosevic uses to carry out atrocities in Kosovo. The air campaign--
central to achievement of that objective--is working and with time is 
increasingly effective. We are confident that it will succeed.
                      Kosovo Strategic Objectives
    Question. Our current strategy to reach our objectives and end the 
conflict in Yugoslavia requires the capitulation by our enemy, 
President Milosevic. Our goals can only be reached by his decision to 
accept our demands. There is no strategy in place to meet our 
objectives if he does not. Our objectives in the 1990 Gulf War set four 
clear objectives, while Saddam Hussein could have capitulated and 
removed his forces from Kuwait, our strategy allowed us to accomplish 
our objectives independent of the enemy's decision process. We had a 
course of action, employing overwhelming ground forces, to obtain our 
objectives. We were in control. Could you please address the open 
available in our current strategy to end the conflict in Yugoslavia, 
independent of the enemy's decision process, that would allow us to 
meet our objectives? What are the potential costs associated with an 
open ended commitment that remains dependent upon Mr. Milosevic's 
capitulation to end this crisis?
    Answer. NATO air strikes against the FRY will continue until 
Milosevic accepts the five conditions agreed to at the Washington 
Summit. Those air strikes have already damaged the military, internal 
security forces, and other pillars of Milosevic's regime, making it 
much more difficult for him to pursue his brutal policy of ethnic 
cleansing.
    At the same time, we are pursuing a diplomatic strategy designed to 
maintain the Alliance's unity, and demonstrate to Milosevic that he is 
totally isolated.
    Intensified air strikes will cause even greater damage to 
Milosevic's regime.
    NATO's ability to seriously damage Milosevic's government enable it 
to deal from a position of strength.
    While we have chosen a different strategy from the Gulf War, our 
strategy, which will not require the same commitment of resources as 
the Gulf War, is appropriate given the circumstances in Kosovo, and 
will be successful if we give it enough time.
                         Kosovo Reconstruction
    Question. Following hostilities in Yugoslavia, Kosovo will require 
substantial funds to provide for resettlement and reconstruction. Is 
the State Department currently developing cost estimates associated 
with this need? What levels of funding are expected? What contributions 
do you expect to be provided by the United States? By other nations?
    Answer. At the time of the peace talks in France last March, the 
United States Government had, along with the UNHCR and the European 
Commission, conducted extensive assessments of infrastructure 
reconstruction needs in Kosovo to repair damage incurred since March 
1998. We had, along with the OSCE, also begun to look at the costs 
related to the implementation of the civilian components of an interim 
peace agreement. Best estimates put total costs around $750 million, 
with over half of this sum for housing repair.
    At present, without the possibility for donors, NGOs, or 
International Organizations to be present in Kosovo, there is simply no 
way of assessing the damage done to the hundreds of villages that have 
been shelled and burned by the VJ and the MUP since the beginning of 
the current offensive. That damage is continuing.
    The EU has already agreed to assume leadership in coordinating 
international reconstruction assistance and in managing the 
reconstruction and development effort in Kosovo once a peace settlement 
is secured.
    While we expect our European allies and partners to contribute the 
bulk of the resources towards this effort, the U.S. should pay its fair 
share.
                       Countering Serb Propaganda
    Question. In what ways were psychological operations used, if at 
all? When did they begin? Have you sustained this effort? Were leaflets 
dropped? Is VOA engaged?
    Answer. Milosevic has closed down all sources of independent and 
objective news and information in the FRY and replaced them with 
shameless propaganda and vicious misinformation. To counter this, we 
are actively providing additional sources of accurate news and 
information to the Serbian people, allowing them to better make the 
informed decisions that will help shape their own future.
    Radio Free Europe and the Voice of America are already available 
throughout Serbia on the AM and short-wave bands, but we are working to 
make this programming available on the more popular FM band as well. We 
are currently broadcasting RFE/RL into Serbia 24 hours a day from radio 
towers we have built for this purpose in Bosnia. We will begin 
broadcasts from FM transmitters in Croatia and Bulgaria this week. 
Programming from these FM transmitters includes VOA, RFE/RL, BBC, and 
Deutche-Welle.
    Direct satellite broadcasts and Internet materials are also being 
used to reach select populations within Serbia. NATO is also 
broadcasting three hours per day into Serbia from military aircraft on 
both FM and AM bands, as well as on television. I have personally made 
four direct addresses to the people of Serbia, and other administration 
and U.S. Government officials have addressed this population. These 
addresses are carried via radio and satellite television, and are also 
audio-streamed over the Internet. To focus our counter-propaganda 
efforts, we have established a Serbia Intelligence Group in the State 
Department, which consists of USIA officers with long experience in 
Yugoslavia and the FRY to develop appropriate messages to the Serb 
people.
    Forty-two million leaflets have been dropped on Serbia and Kosovo 
since this operation began. Although the civilian International Public 
Information campaign has been ongoing, the military information 
campaign began the week following the first NATO airstrikes.
    This sustained International Public Information (IPI) and 
International Military Information effort are key components of our 
overall effort to achieve our broad objectives in the region.
                                 Haiti
    Question. The U.S. military has maintained forces in Haiti since 
the September 1994 mission to restore democracy. Reports have indicated 
the cost of these operations is about $22 million a year, that the 
current political situation has become increasingly unstable and that 
Gen. Charles Wilhelm, Commander of the US Southern Command, has 
recommended to end the permanent U.S. presence there. (Washington Times 
March 24, 1999, GOP Lawmakers Propose Pulling Troops from Haiti).
    What is the State Department's current assessment of the situation 
in Haiti, what are our specific military roles and missions in Haiti, 
what is the funding level for this ongoing operation, what are the 
specific objectives that must be achieved before the State Department 
will recommend an end to the military mission, when do troops come 
home?
    Answer. With the recent formation of a Provisional Electoral 
Council (CEP) and a new Cabinet, Haiti is moving towards holding 
legislative and local elections pending from last year. Free, 
transparent, and inclusive elections, in consonance with the Haitian 
constitution, will be the best path forward for resolving Haiti's 
prolonged political impasse and restoring fully the parliamentary 
branch. Several incidents of violence against politically-linked 
Haitian citizens--including the killing of an opposition senator--have 
raised concern that some may seek to prevent elections through 
intimidation. The motives behind the incidents remain unclear, although 
investigations continue.
    The U.S. Military presence has contributed to continued stability 
and served as a visible manifestation of U.S. support for Haiti's 
democratic transition and economic development. As preparations for the 
long-awaited elections get underway, this role will continue to be 
important to U.S. interests. Currently, the roughly 400-strong U.S. 
military support group conducts civil engineering and humanitarian 
assistance projects. It has dug dozens of wells; its medical clinics 
have provided care to tens of thousands of Haiti's poor. These projects 
provide important training for U.S. troops as well as essential 
services to the Haitian people.
    For the time being, these mutually beneficial exercises will 
continue in Haiti with gradual reductions and eventual withdrawal. 
Consistent with our commitment to reduce and eventually withdraw our 
troops from Haiti, in August 1998 the President approved a modest 
reduction in force strength and in the frequency of engineering 
projects undertaken.
                               Terrorism
    Question. Following the U.S. Strikes in Sudan and Afghanistan, you 
conducted a press briefing on 20 August 1998 and stated ``Today the 
United States is asking every nation to stand publicly against those 
who perpetrate, finance or otherwise support terrorism. We're asking 
governments to join us in taking the actions necessary to deter and 
defeat terrorists acts. And we recognize that this is a long-term 
struggle, as the President said, but we recognize as well as that it is 
a struggle we must win.''
    What is our current strategy in this campaign and what funds and 
resources are you asking to sustain this campaign?
    How would you rate our progress to date?
    Answer. The United States has a long range strategy against 
terrorism which includes bringing terrorists to justice and working 
with other countries to deter and contain terrorism; applying pressure 
to terrorist states that sponsor terrorism to change their behavior and 
make no deals with terrorists, so as to avoid encouraging additional 
acts of terrorism.
    We employ a variety of tools in this effort, including economic 
sanctions, diplomatic pressures, intelligence assets, training to 
enhance the counterterrorism capabilities of friendly countries, and 
military resources if appropriate.
    The specific resources for this effort include the request of $33 
million for the antiterrorism assistant program for FY 2000. The ATA 
program is launching new initiatives to help terrorist fund raising and 
potential use of weapons of mass destruction, programs that received 
initial funding in the FY 1999 emergency supplemental. The ATA program 
is financed through the Foreign Operations Appropriation. Other 
specific programs include the counterterrorism research and development 
program and the terrorism rewards information program, both funded 
through the State Department budget.
    These specific programs, however, reflect only part of our effort 
to fight terrorism. A wide variety of posts overseas and bureaus and 
offices in the State Department are involved in the efforts to enlist 
the cooperation of other nations in the fight against terrorism. 
Without strong embassies overseas, which, for example, can develop good 
working relationships in advance with the host country, it would be 
impossible to obtain the kind of close cooperation needed.
    The rate of progress in countering terrorism is difficult to 
measure. State sponsorship is in decline and the number of 
international terrorism attacks had been falling markedly during the 
past five years. But we are seeing more mass casualty attacks, such as 
those that took place against the U.S. embassies in East Africa. The 
emergence of loosely affiliated and previously unknown small groups, 
which often are composed of radical religious fundamentalists and whose 
members are willing to commit suicide to further their ``cause'' has 
greatly complicated the intelligence gathering effort. These groups are 
more difficult to penetrate and disrupt.
                              North Korea
    Question: The State Department is requesting $55 million this year 
for KEDO. I am opposed to this large increase for basically two 
reasons: it is much more than the U.S. share was promised to ever be, 
and--from what I hear in media accounts--we are buying a pig in a poke. 
We provide the oil while North Korea apparently proceeds to develop an 
underground nuclear program.
    Does any semblance of compliance from North Korea with the Agreed 
Framework remain to justify this enlarged request?
    Will the Department of State and/or appropriate authorities explain 
to me what kind of structure they believe is being developed 
underground?
    I will continue to oppose this appropriation strongly until I am 
convinced our national interest is still being advanced with it instead 
of compromised through the enrichment of a nation providing sensitive 
technology to Iran, threatening Japan, and stealing food from its own 
starving citizens.
    Answer. The Administration request of $55 million for KEDO in FY 
2000 is designed to maintain the Agreed Framework between the United 
States and North Korea by ensuring deliveries of heavy fuel oil (HFO) 
to the DPRK while seeking to pay off KEDO's HFO debt.
    While the Agreed Framework has not removed all questions about 
North Korea's nuclear activities, it has succeeded for the past four 
and one-half years in freezing the DPRK's graphite-moderated reactors 
and related facilities at Yongbyon and Taechon, placing these 
facilities under continuous IAEA monitoring, and canning the spent fuel 
from the 5 MW(e) experimental reactor. IAEA monitoring, along with 
National Technical Means, has allowed us to determine that the DPRK is 
complying with the freeze provisions of the Agreed Framework. Canning 
operations, undertaken jointly with a team of U.S. experts, have been 
largely completed, and the current clean-up of remaining spent fuel rod 
fragments is expected to be finished in the next few months.
    On March 16, 1999, U.S. negotiators reached agreement providing 
access for a team of U.S. experts to the suspect underground site at 
Kumchang-ni. This team will visit the site beginning May 20, 1999, and 
will attempt to determine the present state, precise dimensions and 
configuration of the site. Following this visit, the Administration 
will be prepared to brief you and your colleagues on the team's 
findings. In accordance with the agreement, another visit will take 
place in May 2000, with follow-up visits continuing as long as needed 
to allay our concerns that the site could be used for nuclear-related 
activities.
    In 1994, we faced the prospect of war. The Agreed Framework has 
moved us from war to negotiation. While not eliminating the threat of a 
North Korean nuclear program, the Agreed Framework has succeeded in 
freezing activity at Yongbyon. Seen in this light, the $55 million cost 
is small. This amount is larger than originally estimated because our 
expectation of others' contributions for the HFO program has been 
changed--due in part to the Asian economic crisis. It should also be 
compared with the $4 billion committed to KEDO by South Korea and 
Japan, which are together taking the primary responsibility for the 
light-water reactor project.
    U.S. policy toward North Korea is currently undergoing review by 
former Defense Secretary Perry. We expect him to make his 
recommendations this spring. Our policy toward the DPRK under the 
Agreed Framework is supported by, and the subject of close 
consultations with, our South Korean and Japanese allies.
                   Development Assistance Priorities
    Question. Can you outline for me the role our embassy officials 
have in the establishment of USAID's in-country development assistance 
priorities? Richard Armitage, in a Christian Science Monitor (3-20-98) 
criticized U.S. assistance by saying there was not a close enough link 
between development and U.S. foreign policy goals. He charges that in 
many cases AID does not get the input of other embassy sections as it 
develops its country aid strategy, resulting in ``development for 
development's sake'' without a clear link to overarching objectives. 
What is your reaction to this? Is folding USAID into the State 
Department a solution or remedy?
    Answer. While some may have felt this way in the past, in fact, 
USAID and the Department of State have been working closely together to 
identify and implement improved coordination mechanisms at both country 
and headquarter levels. We have made excellent progress, and will 
continue this, consistent with integration legislation on State-USAID 
cooperation.
    The first step was to clarify goals and objectives. In September 
1997, the International Affairs Strategic Plan (IASP) was issued to 
provide an overarching framework for the international affairs goals of 
all executive agencies of the United States Government. This plan was 
developed with extensive participation of the various foreign affairs 
agencies, including USAID, and was also vetted with stakeholders in 
Congress. The plan describes seven core U.S. interests and sixteen 
strategic goals in the areas of national security, economic prosperity, 
protection of American citizens and border security, law enforcement, 
democracy, humanitarian assistance, environment, population, and 
health. Both USAID's and the Department of State's Agency Strategic 
Plans are fully consistent with the IASP.
    Having clarified higher level goals, we then developed and put in 
place better coordinating mechanisms at the country level. Starting in 
1998, each Embassy Country Team (comprising the heads of all USG 
agencies at a post) was required to produce a strategy document, the 
Mission Program Plan (MPP), which summarizes how the IASP is being 
implemented in a given country. MPPs incorporate the work of all 
agencies working in a country, including USAID. they represent the 
combined efforts of the Country Team and are approved by the 
Ambassador. They are then reviewed in Washington and used to agree on 
program priorities and resource requests.
    USAID requires that all of its strategic planning documents 
prepared at the country level are both fully consistent with the MPP, 
and approved by the Ambassador before being submitted to Washington for 
review. USAID prepares detailed country Strategic Plans covering 
several years of operations in a given country. The USAID strategic 
plans are more detailed than the MPPs and provide the information 
necessary for Washington review and approval of multi-year programs. 
The Department of State participates closely in reviews of USAID 
country Strategic Plans at the Washington level.
    Both the MPP, which is prepared annually, and USAID's more detailed 
Results Review and Resource Request or ``R4'' document provide annual 
performance assessments of each strategic goal pursued in a country. 
Both documents are shared by USAID and Department staff and are used to 
coordinate budget requests as well as approve any changes in strategy 
direction at the Washington level. USAID and Department staff 
coordinates preparation of annual guidance on both the MPP and the R4 
and are continually assessing the adequacy of coordination and 
identifying improvements.
    The recent plan developed pursuant to the Foreign Affairs Reform 
and Restructuring Act has strengthened the relationship between the 
Department of State and USAID. This new relationship and strengthened 
coordination in the field will ensure strong development objectives 
without the need for further reorganization.
                                  Iran
    Question. Have there been any signs that Iran is decreasing its 
support for terrorism or its efforts to acquire weapons of mass 
destruction and the missiles to deliver them?
    Answer. Iran is continuing its efforts to develop a nuclear weapons 
capability. It also is pursuing indigenous ballistic missile and 
chemical and biological weapons production capabilities and is 
aggressively seeking equipment and technology from foreign sources for 
these programs.
    Iran continues to sponsor terrorism. Despite public statements 
condemning certain terrorist acts, Iran supplies training, funding, and 
other means of support to a variety of terrorist groups.
                                  Iran
    Question. How much assistance is Iran currently supplying to Hamas 
and Hizballah?
    Answer. Iranian assistance to these terrorist organizations takes 
many forms, including money, weapons, munitions, and training. It is 
impossible to affirm a single figure for the total amount of Iranian 
aid to Hamas and Hizballah. In the case of Hizballah, we estimate this 
support to be in the $50-100 million range per year. In the case of 
Hamas, total Iranian support probably amounts to $2-3 million per year.
    Question. Last month, the Administration publicly announced that it 
would not raise the quota on Russian launches of American satellites 
until we began to see serious Russian efforts to restrict the transfer 
of missile and nuclear technology to Iran. What is your assessment of 
current attitude and performance of the Russian government in terms of 
the transfers of dangerous technologies to Iran? Do you agree with 
reports of notable decline in Russian responsiveness on this issue in 
the last six months? If so, what do you attribute this decline?
    Answer. Since January 1997, the Administration has informed the 
Russian Government that we will be unable to raise the current quota 
for launches of commercial satellites to geostationary orbit until 
Russia halts cooperation with Iran's ballistic missile program. We 
believe the commercial space launch quota limitation gives the Russian 
government a strong incentive to halt these technology transfers.
    Despite the Russian government's nonproliferation and export 
control efforts, Russian entities continue to cooperate with Iran's 
ballistic missile program, and to engage in nuclear cooperation with 
Iran beyond the Bushehr nuclear reactor project. Although we had seen 
some improvement in Russia's efforts to crack down on missile-related 
activities during the first half of 1998, we have seen backsliding 
since then. We continue to receive reports of ongoing contracts, 
cooperation, and assistance by Russian entities to these Iranian 
programs.
    During the past year, the USG imposed penalties on ten Russian 
entities. In January, the Administration used existing authority to 
impose administrative measures against two Russian entities for 
nuclear-related cooperation with Iran and one Russian entity for 
missile-related cooperation. Last July, we took similar action against 
seven Russian entities involved with Iran's ballistic missile program.
    In addition, we are continuing our longstanding, broad, and 
intensive efforts with the Russians to stop proliferation-related 
activities. We and our allies continue to press the Russian government 
to end cooperation between Russian firms and the Iranian missile and 
nuclear programs and to bolster its export control and enforcement 
capabilities.
    As part of this effort, U.S. and Russian experts in the past two 
months have developed an action plan to address some of our most 
pressing missile proliferation concerns, including development on a 
priority basis of internal compliance offices at several Russian 
entities. We have developed a similar plan for the nuclear area that 
also includes enhanced export control measures. U.S. and Russian 
experts met in late April to begin implementation of these plans.
    Question. What steps are we undertaking to persuade Russia to 
improve its performance? Are we prepared to sanction additional Russian 
entities, beyond the ten already under penalties, if there is hard 
evidence implicating them in the Iranian programs. On the other hand, 
are we prepared to offer incentives for good behavior on the part of 
Russia?
    Answer. During the past year, we imposed administrative measures 
against ten Russian entities for their nuclear and/or missile-related 
cooperation with Iran. In doing so, we banned U.S. exports to and 
Russian imports from these ten entities. We also banned U.S. government 
procurement from and assistance to these entities. These measures will 
remain in force until we determine it is in the foreign policy or 
national security interests of the United States to lift them in whole 
or in part, or until we determine there has been reliable evidence that 
the entities' proliferation behavior has ceased.
    We believe these measures also helped to motivate the Russians to 
agree to two action plans aimed at curtailing cooperation by Russian 
entities with Iran's missile and nuclear programs. The establishment of 
effective internal compliance offices in entities of concern is at the 
heart of the action plans. U.S. and Russian experts met last month to 
begin implementation of these plans.
    We are continuing our longstanding, high-level intensive effort to 
press the Russian Government to end cooperation with the Iranian 
missile and nuclear programs and to bolster export control enforcement. 
We will continue to raise missile and nuclear cooperation in our 
discussions with the Russian side until all of our concerns are 
resolved.
    We remain prepared to impose administrative measures in additional 
cases, when we believe that doing so is in the national interests of 
the United States, and to implement the requirements of U.S. sanctions 
legislation.
                              Russia/Iran
    Question. How firm is the Administration with respect to the policy 
on satellite launchers?
    Answer. We have linked decisions on the space launch quota to 
Russian performance on curbing missile cooperation with Iran in order 
to provide a strong incentive for the Russian government to take 
affective action against transfers of missile technology to Iran.
    Future decisions on the space quota will depend on Russian actions 
with respect to our missile proliferation concerns.
                    U.S. Army School of the Americas
    Question. I support the goals of our International Military 
Education and Training program and particularly recognize the important 
role of the School of the Americas in our own hemisphere. With our 
armed forces spread so thin and dollars so limited, we need approaches 
like the school to fully implement our foreign policy. Do you agree 
with this view, that this kind of direct contact with foreign 
militaries is just as critical as ever?
    Answer. Yes. Military professionalization is a fundamental 
component of our foreign policy efforts to promote stability and 
strengthen democratic institutions of civilian government. The U.S. 
Army School of the Americas contributes to this effort by providing 
training and instruction to Latin American military members on civilian 
control of the military, promotion of democracy, and respect for human 
rights.
    The School encourages cooperation among military and police forces 
by training both groups together, providing what is often the first 
exposure these security forces have had in working together. The School 
also provides training programs in areas that enhance regional 
cooperation, such as peacekeeping, demining operations, counterdrug 
operations, medical assistance, leadership development, and military 
justice.
    In order to ensure that only students with a clean human rights 
record receive training, we have worked with DoD to develop and 
institute procedures to vet every student being considered for the 
school. Additionally, the School ensures that human rights issues and 
respect for civilian authority are integrated throughout the coursework 
and in field exercises.
                                  Iran
    Question. Does it appear that President Khatami is in control? Does 
he even participate in security related decision-making? What are the 
prospects that he can prevail in his efforts?
    Answer. President Khatami exercises authority over much of the 
Iranian government, but is outranked by Supreme Leader Khamanei on 
issues involving the Iranian armed forces, the Revolutionary Guards, 
the Judiciary and the Ministry of Intelligence. In addition, powerful 
foundations called ``bonyads,'' which control the holdings of the 
former Shah and figures associated with his regime, report directly to 
the Supreme Leader, and not President Khatami. The bonyads exercise a 
significant impact on Iranian economic activity.
    Khatami's election two years ago alarmed conservative elements in 
Iran. As Khatami has pressed for change in both domestic and foreign 
affairs, these conservatives have resisted. The outcome of this 
struggle will depend in great part on the evolving power relationships 
among Khatami, Supreme Leader Khamanei and Expediency Head (and ex-
president) Rafsanjani.
    The Iranian public apparently supports Khatami and his agenda of 
promoting the rule of law, reducing government intrusion into people's 
lives, and increasing freedom of expression.
    Question. What is your assessment of Iranian progress in the 
missile and nuclear arenas? What action are we undertaking to address 
these developments?
    Answer. Iran continues its efforts to develop a nuclear weapons 
capability, but has made little progress to date due to the reluctance 
of most nuclear suppliers to provide any assistance to Iran. It also is 
pursuing a multi-track effort to develop both liquid and solid 
propellant missile systems and is aggressively seeking equipment and 
technology from foreign sources for these programs. Iran has made 
significant progress in the last few years toward its goal of becoming 
self-sufficient in ballistic missile production, as demonstrated by its 
indigenous productions of Scud missiles and the July 1998 flight test 
of the Shahab-3 medium-range ballistic missile.
    We strongly oppose any cooperation with Iran's nuclear and missile 
programs, and have engaged for many years in aggressive efforts to stop 
the proliferation of nuclear and missile technology to Iran, including 
through the imposition of sanctions. During the past five years, we 
have worked multilaterally, through the Nuclear Suppliers Group (NSG) 
and the Missile Technology Control Regime (MTCR), and bilaterally 
through discussions with supplier governments, to restrict their 
missile and WMD-related exports and cut off sources of outside supply 
to Iran's missile and nuclear programs. We have held four rounds of 
talks with North Korea to convince it to restrain its missile 
technology exports, and we are pursuing an intensive high-level effort 
to impede Iranian efforts to obtain missile and nuclear technology from 
Russian firms. In addition, we continue to engage China in extensive 
nonproliferation discussions, and raised our concerns about Chinese 
cooperation with Iran at the highest levels. We also continue to press 
China to bring its export policies and practices better in line with 
international standards.
    These efforts have produced results. Over the past year, Russia has 
put in place new legal authorities to control the export of any item 
destined for a program of proliferation concern, has stopped several 
activities of concern, and has investigated others, including reports 
of Russian firms cooperating with Iran. China has pledged not to assist 
unsafeguarded nuclear facilities, to phase out its nuclear cooperation 
with Iran, and not to export MTCR-class ground-to-ground missiles. 
China also has announced that it is studying the possibility of joining 
the MTCR and has stated that it would not sell missiles to Iran.
    The Administration also uses sanctions and other tools to combat 
proliferation. During the past year, the USG imposed penalties on ten 
Russian entities. In January, the Administration imposed administrative 
measures against three Russian entities for their nuclear- and missile-
related cooperation with Iran. Last July, we took the same action 
against seven Russian entities involved with Iran's ballistic missile 
program. And in 1992 and 1996, we imposed missile sanctions on North 
Korea for selling missile technology to Iran.
                     The Middle East Peace Process
    Question. The State Department spokesman and others have now said 
on several occasions that the Palestinian Authority is in compliance 
with many of the commitments it entered into at Wye. What commitments 
are the Palestinians complying with and which ones are they not 
implementing?
    Answer. Our position is that both Israel and the Palestinians 
fulfilled all their commitments required under the first phase of the 
Wye River Memorandum. Under phase two, the Palestinians have fulfilled 
many of their commitments, including the annulment of the objectionable 
portions of the PLO Charter and the fight against terror. The 
Palestinian security services have been effective in taking action 
against those terrorist groups. We continue to press the PA to do 
everything possible to prevent terror and to cooperate fully with the 
Israelis.
    There are other commitments under phase two that they have yet to 
fulfill.
    The Palestinians have also continued to work with the Israelis in 
the Anti-Incitement Committee. The Palestinians put an effective legal 
framework in place for the collection of illegal weapons, but more work 
needs to be done in this area. The U.S. agreed in the context of the 
Wye Memorandum to assist the Palestinians in this effort. We have 
consulted with Congress and are now moving ahead to deliver this 
assistance as quickly as possible.
    We believe that renewed efforts by both sides aimed at implementing 
the Wye Memorandum will facilitate further progress.
    Question. Have the Palestinians outlawed all organizations of a 
military, terrorist or violent character as required by the Wye 
Memorandum?
    Answer. The Wye River Memorandum obligated the Palestinian side to 
``inform the U.S. fully of the actions it has taken to outlaw all 
organizations (or wings of organizations, as appropriate) of a 
military, terrorist or violent character . . ..''
    The Palestinians have provided to us a March 3, 1996 statement 
issued by the Palestinian Authority stating that a meeting of the 
Higher Palestinian National Security Council, chaired by Chairman 
Arafat, had decided to ban the activity of all paramilitary groups, 
including the armed wings of HAMAS and the Palestinian Islamic Jihad.
    We have some questions regarding the legal status of this 
statement. We are discussing this with the Palestinians.
    The Palestinian security services have been effective in taking 
action against those terrorist groups.
    We continue to press the PA to do everything possible to prevent 
terror and to cooperate fully with Israel in this effort.
    Question. Has the PA provided the detailed programs for 
implementing the work plan for fighting terrorism as agreed to at Wye?
    Answer. We believe that the Palestinian security organizations are 
making a very serious and credible effort to combat terror. The 
Palestinians have shared with us security work plans.
    We are asking the Palestinians to do all they can to prevent 
terror. We will continue to press the Palestinians to meet that 
standard.
    Question. Are PA efforts consistent in West Bank compared with the 
Gaza Strip?
    Answer. We believe that the Palestinian security organizations are 
making a very serious, systematic and credible effort to combat terror 
in both the West Bank and Gaza in which they operate.
    We continue to press the PA to do everything possible to prevent 
terror and to cooperate fully with Israel in these efforts.
    Question. Are arrested security offenders held the required amount 
of time and is this being coordinated with the U.S. as required?
    Answer. The U.S. is unalterably opposed to unwarranted releases of 
people involved in terrorist activities. We have made this absolutely 
clear to the Palestinian authorities.
    We explored the releases of Palestinian prisoners that took place 
early this year thoroughly with both the Palestinians and the Israelis. 
Based on everything we know, we do not believe that those released pose 
a threat.
    Regarding some court-ordered releases that took place at the time 
of the Muslim religious holiday in late March, a small number caused us 
serious concern. We expressed those concerns to the Palestinians. The 
Palestinians reviewed these cases and re-arrested some of the 
individuals on the basis of new charges.
    We are continuing to discuss with the PA the remaining cases of 
concern.
    We will continue to follow up on this issue in a systematic way.
    Question. Can you also describe Israel's status vis-a-vis Oslo and 
Wye?
    Answer. We are asking that both parties fulfill all their 
obligations and implement the Wye Memorandum completely.
    Both parties implemented their commitments in phase one. In phase 
two, the Palestinians have implemented many but not all of their 
commitments cited in the timeline. The Israelis have not carried out 
their objections in the second phase. These include: prisoners' 
releases, acquainting the Palestinians with areas from which Israel 
would redeploy, and the second stage of further redeployments.
    This is a factual assessment of Wye implementation to date.

            Questions for the Record Submitted by Ms. Pelosi

                               __________
                    Assistance to Front Line States
    Question. The Kosovo supplemental request contains about $90-$100 
million to help the front line states of Romania, Bulgaria, Albania and 
Macedonia. In addition, $10 million in additional funds are intended to 
continue our assistance to the government of Montenegro. Can you 
comment on the rationale for helping these countries and what the funds 
will be used for?
    Answer. The Administration has requested emergency supplemental 
appropriations of $100 million in Economic Support Funds (ESF) and $50 
million in Support for East European Democracy (SEED) funds for the so-
called ``front-line'' states--Albania, Bosnia, Bulgaria, Croatia, 
Romania, Macedonia, and the government of Montenegro.
    The Kosovo crisis has generated severe political, economic and 
social strains in the neighboring states. Politically, reform-minded 
governments are under attack, particularly in neighboring countries 
with religious or ethnic ties to Serbia, as nationalist leaders exploit 
ethnic divisions to gain support. Socially, community-level pressures 
from massive influxes of refugees are also fraying social safety nets 
and straining local infrastructure beyond capacity.
    An April World Bank and IMF assessment of the economic consequences 
of the Kosovo crisis estimated lost export earnings, trade diversion, 
weaker capital accounts, and potentially higher debt service costs will 
cause balance of payments deficits in Southeast Europe of $1.5 billion 
in 1999. This is in addition to an estimated overall humanitarian cost 
in 1999 of $300 million related to assisting refugees.
    SEED monies would address the political, economic and social 
consequences of the conflict. For example, programs would increase 
public security by training law enforcement officers; fight corruption 
and crime that preys on refugee populations; promote political 
participation by all ethnic groups; improve responsiveness of local 
governments; provide financial advice to governments as they cope with 
economic stress created by the emergency; help create conditions for 
the return of foreign investment; and support labor redeployment 
programs to ease high levels of unemployment.
    ESF funds would be used to cover balance of payments financing gaps 
in the purchase of imports, or would be given as budgetary support to 
the Ministry of Finance for government purchases. USAID would oversee 
and audit the program. The World Bank, IMF, EU, and other major donors 
will contribute the majority of funds to cover the financing gap of 
these countries (except for Montenergro, which is not eligible for 
World Bank/IMF funding); the U.S. contribution is under ten percent.
                     Support for Front Line States
    Question. The IMF and the World Bank are apparently working on a 
financial package for these countries. Can you comment on the elements 
of this plan?
    Answer. The Fund and the Bank are collaborating closely with other 
international financial institutions, the donor community, and the 
affected countries to refine the estimates of regional and country 
specific financing needs and to assess the availability of external 
financing. The World Bank and the European Union have agreed to lead a 
task force to undertake needs assessment, formulate economic 
development strategies and coordinate the international donor process 
in the affected states.
    The IMF and World Bank produced preliminary balance of payments and 
budgetary gaps generated by the effects of the conflict, as well as an 
assessment of the humanitarian cost. Donors group meetings have been 
held for Bulgaria (April 21) and FYROM (May 5) to address the financing 
gap identified by the Bank/Fund paper; meetings are planned for Albania 
(May 25) and Bosnia-Herzegovina (May 20-21).
    While all humanitarian relief costs should be financed by external 
aid and grants, other financing needs arising from the crisis should be 
met from both bilateral and multilateral sources, and the international 
financial institutions (IFIs) should play an important role in this 
effort. The IFIs ought to take the lead in meeting emergency BOP/
budgetary financing gaps, through expanding financing under existing 
country programs and through adapting emergency mechanisms. External 
financing of BOP and budget costs in surrounding countries that are 
ESAF eligible should be provided on concessional terms.
    Specific information about Bank/Fund programs, which is subject to 
change, follows:
    Albania: The IMF believes that Albania is sufficiently on track 
with its three-year Enhanced Structural Adjustment Facility to go ahead 
with the second disbursement under the $47 million program, although an 
increase of up to 25% in reaction to Kosovo is contemplated. The World 
Bank is planning $95 million in lending, of which $30 million has been 
approved, plus a $1 million grant.
    Bosnia: The Bank plans $94 million in new lending, if the IMF 
completes a successful Stand-by review. A donors conference is 
scheduled for May 20-21.
    Bulgaria: The IMF is considering an augmentation of Bulgaria's 
existing Extended Fund Facility, but no decision has been made. The 
World Bank will increase and accelerate existing lending, for a total 
of $175 million in adjustment lending this year.
    FYROM: The May 5 donors meeting resulted in pledges totaling $252 
million towards an estimated financing gap of $400 million; donors have 
promised additional funds to meet the total need. The Bank plans $50 
million in new lending, while the Fund expects to conclude a $32.6 
million Stand-by Credit shortly.
    Question. What role can or should international banks play in the 
reconstruction of Kosovo in the context of an independent or UN 
protectorate status?
    Answer. It is premature to define a role for the international 
banks in a post-conflict Kosovo. Much depends on the political 
arrangements made for Kosovo and with the FRY. In a post-conflict 
Kosovo, the IFIs could play a role in structural reform and 
macroeconomics stabilization. Although every situation is unique, 
designers of any program would undoubtedly draw on ideas and lessons 
learned in similar economic assistance efforts in Bosnia and the West 
Bank/Gaza.
                                 Kosovo
    Question. I want to first concentrate on the plight of refugees in 
Kosovo. As the situation with the 500,000 refugees who have left Kosovo 
stabilizes in surrounding areas, we have reports of over 700,000 
refugees left homeless without any visible means of support. What 
options are being considered to get assistance to these people? New 
reports indicate that airdrops and use of Greek non-governmental 
organizations has been considered.
    Answer. We are extremely concerned about the fate and conditions of 
internally displaced persons (IDPs) in Kosovo. Various sources 
estimates that there could be up to 700,000 IDPs in Kosovo, all of whom 
have been cut off from international food assistance since Belgrade 
began its most recent oppression.
    The International Committee for the Red Cross (ICRC) is working 
with the Government in Belgrade to develop an operational plan to 
distribute food and relief supplies to the displaced Kosovars still in 
Kosovo. The Greek government has been providing relief supplies across 
the border through the use of Greek NGOs. We, of course, support any 
efforts along these lines. Commercial airdrops are an option that is 
being explored along with other means to reach IDPs. It is estimated 
that airdrops could begin as soon as two weeks after a decision to 
implement them has been made.
    Our efforts on this front will not change our political or military 
objectives in Kosovo. We reject any such proposal that calls for an 
extended pause in NATO's operations.
    The ultimate responsibility for the situation faced by these IDPs 
rests solely with Slobodan Milosevic, and he knows what he must do.
    Question. UNHCR has recently decided to concentrate on caring for 
the refugees in the region rather than moving them outside the region. 
This will mean a continued heavy burden on Albania particularly. Can 
you comment on the flow of refugees from Kosovo, the situation in 
Albania, and the extent to which Macedonia is cooperating with 
international efforts to care for refugees?
    Answer. UNHCR is currently supporting efforts to move refugees out 
of the region. Since early April, 44,500 refugees have been evacuated 
from Macedonia for third countries. UNHCR has received offers for 
135,000 places in 39 countries.
    There are currently over 230,000 refugees on Macedonia and 430,000 
refugees in Albania, as well as 64,000 internally displaced persons in 
Montenegro. We appreciate the efforts of the governments of Albania and 
Macedonia in taking in refugees and the efforts of the government of 
Montenegro in taking in internally displaced persons from Kosovo.
    Relatively early in the present crisis, Macedonia did close its 
border with Kosovo intermittently. After hearing the concerns of the 
U.S. and others, however, Skopje reopened the border and has kept it 
open.
    Macedonian police violated the 1951 Convention on Refugees on one 
occasion by sending refugees involuntarily to Albania. Following our 
protests, that did not recur. In general, we believe the government is 
making a good-faith effort to respond to this crisis.
    We know from refugee accounts that the Serbs have, in the past, 
told passengers on trains that were turned back that the Macedonians 
had closed the border, even when that was not true.
                        Kosovo: Police Training
    Question. Separate camps have apparently been set up in Albania for 
the KLA. The administration's request will contain about $30 million to 
begin training a new police force for Kosovo. Can you comment on what 
our policy will be towards helping the KLA and how you intend to 
recruit and train a new police force for Kosovo?
    Answer. No international refugee camps have been set up 
specifically for the KLA.
    A local civilian police force is a fundamental element in a 
solution to the situation in Kosovo. We want to speed development of 
such a force, and limit the time the international community will have 
responsibility for public security in Kosovo. We are considering 
identification and training of police from the general populations of 
the Kosovar refugee camps. An international team of police experts is 
currently in the camps assessing: the feasibility of such a program; 
the best means for pursuing it; the process for identifying candidates; 
possible training sites within the region.
                            Refugee Children
    Question. Madam Secretary, yesterday's Washington Post has a front-
page article on the plight of refugee children in Kosovo. The Foreign 
Operations Committee has recommended special funding for vulnerable 
refugee children especially those that are separated from their 
parents. Could you give us the status of that program?
    Answer. The Administration is pleased to have strong Congressional 
support for promoting greater attention to the special needs of refugee 
children.
    The U.S. has taken a leadership role in promoting attention to 
refugee children and their protection and will continue to do so. Our 
Bureau of Population, Refugees, and Migration works closely with 
international and non-governmental organizations to ensure that 
programs are designed to recognize and meet the special needs of 
refugee children, including those responding to the crisis in Kosovo.
    We are providing funding for NGOs, such as the American Refugee 
Committee, the International Rescue Committee, and the Save the 
Children Alliance which are focusing much of their efforts on providing 
health care and psycho-social counseling for children in Macedonia and 
Albania. We are also providing funding to UNICEF as well as to UNHCR 
which has the lead responsibility for the protection of children.
    Last year, we contributed over $7 million towards specific programs 
for children throughout the world. Activities included the promotion of 
girls education, the rehabilitation of child soldiers, assistance to 
and tracing for unaccompanied children, open education and training for 
adolescents. Of particular note is the Liberian Children's Initiative, 
a groundbreaking cooperative effort by UNHCR and UNICEF to focus on 
children in post-conflict Liberia.
    It is important to add that all our funding for refugee protection 
and assistance helps refugee children either directly or indirectly.
    We are presently working with UNHCR, UNICEF and interested NGOs on 
their funding priorities for 1999. We anticipate funding specific 
projects for refugee children at a level similar or higher to that of 
last year. We will also continue to encourage UNHCR's efforts to 
mainstream its programming for women and children by working closely 
with the organization, by providing targeted funding, and by raising 
this as a priority in the organization's governing bodies.
    Question. The Committee is also concerned that UNHCR is changing 
the emphasis on children and women's issues by reorganizing and 
downgrading the positions of children and women's coordinators. Has the 
Department of State taken a position that indicates the importance of 
these positions and these issues?
    Answer. I share your concern that UNHCR maintain the positions of 
Children's and Women's Coordinators at a senior level with direct 
access to the most senior management of UNHCR. Assistant Secretary Taft 
has raised this matter directly with Mrs. Ogata. We understand that the 
decision has now been made that the Coordinators should retain their 
visibility and remain in the Office of the Director of Operational 
Support and report to her directly. We are pleased with this decision 
and will continue to follow this matter closely.
    The Department of State has worked hard over the past years to 
ensure that the needs of women and children are fully incorporated into 
every policy and program of UNHCR. While there has been progress and 
while we share UNHCR's desire to see these policy objectives further 
put into place at the field level, we have said repeatedly that this is 
not the time to eliminate the visibility and focus that the 
Coordinators provide.
    We further believe it is imperative that the leadership of UNHCR 
continues to take direct responsibility for ensuring that the challenge 
facing refugee women and refugee children are central to UNHCR's 
programming.
                         Kosovo--FY 2000 costs
    Question. The anticipated supplemental request will address only 
the FY 1999 costs for Kosovo and contains little or no funding for 
reconstruction. While it may be premature to ask about FY 2000 
reconstruction budgets, I would ask what role will the U.S. play in 
ongoing refugee care and reconstruction, and what financial role do you 
expect that European allies to play?
    Answer. There will be a major international effort to rebuild 
Kosovo so that people can return to their homes once conditions permit.
    The EU has already agreed to assume leadership in coordinating 
international reconstruction assistance in Kosovo once a settlement is 
secured.
    While we expect our European allies and partners to contribute the 
bulk of the resources towards this effort, the U.S. should pay its fair 
share. Returning refugees to their normal lives will not be possible 
until reconstruction is well underway. A rapid response requires a 
prominent U.S. role given our special experience in working with local 
groups, since bringing to bear our expertise in such disciplines as 
strengthening civil society will be critical. Above all, we must do our 
fair share if we expect our European allies to continue to play an 
important role in reconstruction in the Western Hemisphere, as they are 
in Central America following Hurricane Mitch.
    Because the FRY is not a member of the World Bank or IMF, their 
resources will not be available for the most part for this effort.
                               UN Arrears
    The effort to obtain Congressional approval of the $1 billion the 
U.S. owes to the UN has been underway for two years now. In that time 
the U.S. has lost the opportunity to secure reductions in the 
assessments for both general dues and for peacekeeping operations. Thus 
the arbitrary linkage put in place by the Republican leadership to 
Mexico City has already cost the American taxpayer over $100 million 
and the amount grows every day.
    Question. The delay has also cost the U.S. in terms of lost 
leadership positions the lost influence within the institution. Madam 
Secretary, I would appreciate your comments on the need for 
Congressional action on UN arrears and on what the delay has cost the 
U.S.
    Answer. We are eager to pay the outstanding U.S. arrears to the 
United Nations, and urge the Congress to approve our request to meet 
this obligation this year. We must--as the President proposes in his 
budget--pay our bills. This delay in paying our arrears is not just a 
question of dollars and cents, it is a matter of honor, of keeping our 
word. It is also a question of national interest. We will be far more 
influential--and far better able to spur further reforms--within the UN 
system and other international organizations if we are meeting our 
obligations to them.
    The delay in paying our arrears costs us in many different ways. 
One is financial: We lost the opportunity to reduce our annual UN 
assessments during negotiations in 1997. We have another chance next 
year, but cannot succeed in lowering our assessment rate until arrears 
funding lost is on the table. After these rates are lowered, the amount 
we are assessed for the UN, peacekeeping, and three major UN 
specialized agencies will be reduced by over $100 million per year.
    There are also other ``costs.'' Our negotiations in all reform 
areas are set back by the arrears. We lost a seat on the UN's key 
budget committee. Many argue that we are not trying to improve the UN, 
but simply save ourselves money. This gives our opponents a cheap point 
on virtually every substantive and financial issue.
    The Administration remains dedicated to meeting our international 
commitments. The U.S. needs to be viewed as a reliable partner in 
multilateral fora. Only by paying our arrears will we demonstrate our 
commitment to the UN and other international organizations which serve 
as invaluable tools in conducting our foreign policy.
                           Military Training
    Question. The subcommittee held a separate hearing on military 
training based upon an extensive report on DoD foreign military 
training activity. Specifically Madame Secretary the report detailed 
numerous deployments of U.S. troops for Joint Combined Exercise and 
Training (JCET). There currently is no mechanism for the DoD or State 
Department to consult with Congress prior to deciding upon JCET 
deployments. There have been several controversial deployments to 
Colombia and Indonesia in particular, from which Congress has been 
excluded from consultation. What in your view is the appropriate role 
for the Congress in making policy decisions about JCET deployments, and 
how and when should we be consulted?
    Answer. Joint Combined Exchanges for Training (JCETs) are 
operational deployments authorized by legislation and are activities 
under the operational control of the Unified Commands.
    We are sensitive to Congressional interest in, and concerns about, 
such activities, as evidenced in the application of a similar Leahy 
amendment provision regarding human rights to DoD-funded training.
    DoD and the State Department have strengthened procedures for human 
rights review of all JCETs. As part of the planning process, the 
Unified Commands, our embassies, and the Department review all proposed 
JCETs. There has been a further refinement of review procedures due to 
implementation of section 568 of the FY99 Foreign Operations 
Appropriation Act and section 8130 of DoD's FY99 Appropriations.
    We believe these procedures provide adequate policy review and 
oversight, in accordance with Congressional guidance. We further 
believe these procedures will ensure that JCETs are conducted 
consistent with US policy objectives and Congressional human rights 
concerns.
                        Central America Disaster
    Question. Madame Secretary the President requested the Central 
America supplemental in February with the hope that Congress would act 
expeditiously. It is now mid-April and the rainy season begins in the 
region in May. Can you indicate for us the impact of the absence of 
Congressional approval for this funding?
    Answer. We are very pleased that the Central America Supplemental 
Budget Request has now been approved and programs can be implemented to 
help the region recover from the devastation of Hurricane Mitch. While 
it is difficult to specifically quantify the impact of the delay in 
approving the Supplemental, clearly, the delay has prolonged the 
hardships of those hit hardest by the hurricane. For instance, 
thousands of people have had to cope for two or three additional months 
with unclean water, no access to health services, poor or non-existent 
roads, temporary housing and other difficult conditions. With the 
Supplemental Budget Request approved, the United States Agency for 
International Development will quickly implement programs to mitigate 
these hardships and help the Governments of Honduras, Nicaragua, El 
Salvador and Guatemala reclaim agricultural lands, more effectively 
manage the watershed and ensure transparency in the reconstruction 
process.
    Question. Can you further delineate what the impacts of a month's 
delay on the Central America supplemental would be?
    Answer. Again, the delay in funding the recovery of Central America 
prolonged the hardships of those hit hardest by the hurricane. The 
delay has also pushed implementation of programs into the rainy season 
and, as the rains increase, this will complicate and delay 
implementation of the programs.
                       Russia/Kosovo Peacekeeping
    Question. Do you feel there is an appropriate role for Russia to 
play, and under what circumstances should it take place?
    Answer. We are actively engaged with the Russians in an attempt to 
find a diplomatic solution to the situation in Kosovo based on the 
principles set forth by the G-8. One of those principles calls for 
deployment of an effective international civil and security presence, 
endorsed and adopted by the UN and capable of guaranteeing the 
achievement of the common objectives. We would welcome Russian 
participation in such a security presence.
                                 China
    Question. What is the status of U.S. efforts to obtain the support 
of other countries on the UN Human Rights Commission for the resolution 
condemning China's human rights abuses?
    Answer. On April 16, we tabled a resolution on China's human rights 
record at the UN Human Rights Commission in Geneva. Poland subsequently 
joined the United States as a co-sponsor. On April 23, when the 
resolution was scheduled to come to the floor for a vote, the Chinese 
delegation introduced a no-action motion which carried by a vote of 22 
(PRC), 17 (U.S.), 14 (abstain), effectively cutting off formal debate 
on the resolution.
    The Administration had mounted an aggressive lobbying effort with 
many high-level interventions to broaden support for the resolution and 
counter the anticipated no-action motion. Although we were able to 
narrow the margin of the loss on the no-action motion as compared to 
1997 when we last supported a resolution, we were very disappointed by 
the final outcome. We believe the resolution should have been debated 
on its merits.
    Question. As I mentioned in my opening statement, as Zhu Rongji was 
here in the U.S., Chinese Public Security Bureau officials visited Bao 
Tong, a former high ranking government official and supporter of 
democratic reforms, to warn him that his recent letter calling for a 
reversal of the Tiananmen Square verdict ``endangered state security.'' 
This warning is a serious one as ``endangering state security'' has 
been used against many critics of the Chinese government. Have you or 
anyone in this Administration raised concern about Bao Tong with Zhu 
Rongji or other high ranking officials travelling with him?
    Answer. We raised Bao Tong's case with officials in Premier Zhu's 
party on April 14, in response to reports that Bao Tong had received a 
warning that his letter calling for a reversal of the Tiananmen Square 
verdict ``endangered state security.'' We also conveyed our concerns to 
the Chinese government in Beijing and here in Washington on April 15.
    We will continue to urge China to respect fundamental human rights 
such as the freedom to peacefully express political views.
                              Middle East
    Question. Israel is the only country in the United Nations that is 
denied access to a regional grouping--the mechanism by which U.N. 
member states are chosen to sit on powerful committees, including the 
Security Council. What is holding up Israel's efforts to gain 
admittance to the Western Europe and Others Groups?
    What are we doing to correct this situation?
    Answer. The United States has worked hard to end this anomaly by 
pressing for Israel's inclusion in the Western European and Others 
Group (WEOG) at the United Nations. The members of the European Union 
continue to oppose the inclusion of Israel in WEOG. This unified EU 
position effectively precludes Israel's admittance by eliminating the 
possibility of a WEOG vote in favor of Israel's candidacy. The EU bases 
its opposition to Israel's candidacy on the view that Israel's actions, 
including ongoing settlement activity, are responsible for the lack of 
progress in the Middle East peace process.
    Representatives of the United States Government have made numerous 
interventions to support Israel's efforts to gain admission to WEOG. 
These efforts were undertaken primarily in New York by members of the 
U.S. Mission to the United Nations supported by approaches in 
Washington, to the EU Troika in Brussels, and in other capitals. To 
date, these efforts have not been successful. Recognizing the 
importance of the regional groups to effective participation in United 
Nations activities, the Administration will continue its efforts in 
support of Israel's admittance to WEOG.
    Specific interventions in support of Israel's candidacy include:
    In July 1997, the U.S. Permanent Representative to the UN met with 
two Members of Congress to outline the positions of other UN members 
regarding Israel's admittance to the WEOG and to discuss the Mission's 
plans to support Israel's efforts.
    In October 1997, the U.S. Deputy Representative to the Economic and 
Social Council (ECOSOC) addressed WEOG to encourage Israel's admission 
as a temporary member, emphasizing the strong U.S. support for Israel's 
admittance.
    In November 1997, the U.S. Permanent Representative made a formal 
statement to the WEOG regarding Israel's discriminatory treatment in 
the UN and urged the WEOG members to admit Israel as a temporary member 
to help address that problem.
    In January 1998, the U.S. Permanent Representative and two other 
Ambassadorial rank officials met with the European Union (EU) Troika to 
press the EU to support Israel's admittance to the WEOG as a temporary 
member.
    In May 1998, U.S. officials (in both New York and Geneva) expressed 
strong support for Israel's admittance to group B of the World 
Intellectual Property Organization (WIPO). The representatives also 
used this forum to press for Israel's full participation in all 
international organizations of which it is a member, including the 
regional groups in the UN General Assembly.
    Also in May 1998, the U.S. Mission to the UN arranged a meeting 
between Members of Congress and representatives of the EU Troika to 
address the issue of Israel's temporary membership in WEOG.
    In October 1998, the U.S. Deputy Permanent Representative met with 
EU permanent and deputy permanent representatives to encourage them to 
support Israel's temporary membership in the WEOG. The Deputy Permanent 
Representative argued that Israel's admittance was long overdue, 
particularly given positive developments in the Middle East peace 
process.
                              Budget Caps
    Question. If the huge cuts mentioned in the Budget Resolution for 
international affairs are translated into a corresponding low 302(b) 
allocation for this subcommittee, foreign affairs spending will be 
devastated. Madame Secretary, I would appreciate your comments on the 
effects that a cut of $2 to $3 billion below last years' level of 
foreign operations spending will have on our national security. (This 
level of reduction is actually less than the amount of $4 to $5 billion 
cut in the Budget Resolution). In my view no region of the world would 
be exempt from cuts with this level of reduction. While the additional 
dollars needed in Defense to resolve worldwide conflicts will 
undoubtedly be provided, there will be little or nothing to pick up the 
pieces and reconstruct countries devastated by war and natural 
disasters.
    Answer. While the Senate's allocation level is about $2 billion 
below the President's request, I understand that and your Committee's 
302(b) allocation is $4.2 billion below the President's request. This 
unrealistically low allocation level coupled with associated outlay 
(spending) reductions would put a straightjacket around American 
leadership and gravely imperil U.S. interests around the world.
    For example, under the Committee's allocation, we could cover our 
commitments to the Middle East Peace Process and spending related to 
programs initiated in previous years. However, it would necessitate 
significant reductions in, or elimination of, most other programs 
funded in the bill. We would need to: begin to shut down USAID and the 
Peace Corps in many parts of the world; cut off most aid to Eastern and 
Central Europe, the NIS, Asia, Africa and Latin America; end most of 
our counter-narcotics and counter-terrorism programs; and cease 
voluntary contributions to organizations like UNICEF.
    Given the scope of our interests, the range of threats to our 
security, and America's role as a champion of freedom and defender of 
human rights, we must have sufficient resources for the implementation 
of our foreign policy.
    In the weeks and months to come, I hope to work closely with you 
and members of the Committee to assure adequate funding levels for 
international affairs. I must emphatically state that the current 
allocations will cripple, perhaps irreparably, our prestige, 
credibility, and influence at the very moment that U.S. leadership is 
looked for by our allies and questioned by our foes.
                                 ______
                                 

            Questions for the Record Submitted by Ms. Lowey

                               __________
                            Family Planning
    Question. I would like you to comment on our international family 
planning programs. Access to family planning services is the most 
effective way to prevent abortion. Yet, some of my colleagues have 
difficulty distinguishing between supporting funding for critical 
family planning services and supporting abortion. Could you clarify for 
us current law regarding the use of federal funds for abortion? And can 
you explain the effect that these family planning services have on the 
incidence of abortion around the world?
    Answer. Current law prohibits use of U.S. foreign assistance funds 
to pay for the performance of abortion as a method of family planning 
or to motivate or coerce any person to practice abortions.
    Support for family planning services, which reduce unintended 
pregnancies, is essential to reducing abortions. For example, family 
planning programs in Russia and Central Asia, supported by the U.S. 
Agency for International Development (USAID) and other donors, have 
resulted in a dramatic decline in the incidence of abortion in the 
1990's. In Russia, abortion rates have declined more than one-third 
during this period.
    A 1998 study of the replacement of abortion by contraception in 
three Central Asian countries--Kazakhstan, Uzbekistan, and the Kyrgyz 
Republic--found that the use of contraception increased by one-third to 
one-half between 1991 and 1996. During that same period, abortion rates 
declined by as much as one half.
    A comparative study of Colombia and Mexico, countries where USAID 
was a major donor in family planning, found that large increases in 
contraceptive use in urban areas in the 1970s and 1980s were 
accompanied by declines of 40 percent or more in abortion rates.
    Question. I want to commend you for including $25 million for the 
United Nations Population Fund in your budget request. As you know, 
about 50% of UNFPA's assistance is devoted to maternal and child health 
programs, including the provision of family planning services. UNFPA is 
a major supplier of modern contraceptive methods and it is engaged in 
the fight to stop the spread of AIDS and other sexually-transmitted 
diseases. Could you comment on the impact that our lack of funding for 
UNFPA in FY99 has had on the organization and the United States' 
influence within the organization?
    Answer. The zeroing out of U.S. funding in FY99 is a significant 
loss for UNFPA, which works with a small annual budget ($309 million in 
1998). UNFPA already has fully designed projects in almost 50 of its 
program countries that it cannot execute without additional funds.
    UNFPA estimates that a $20 million loss of funds will result in 
program cutbacks that deprive 870,000 women of effective contraception. 
They are likely to experience a half-million unwanted pregnancies 
(200,000 of which will be aborted), 1200 maternal and 22,500 infant 
deaths, and 15,000 life-threatening illnesses and injuries during 
pregnancy and childbirth.
    Lack of U.S. funding also hurts UNFPA's efforts to curtail the 
spread of sexually transmitted diseases including HIV/AIDS, limits its 
work against the practice of female genital mutilation, and damages its 
programs aimed at supporting better health, equal access to health and 
education for women, and economic security.
    Our extensive bilateral experience in international population 
assistance gives the U.S. a respected voice on UNFPA program issues. 
However, our ability to influence key budgetary and management issues 
within UNFPA is endangered by the absence of a U.S. contribution to the 
organization.
                             United Nations
    Question. As you know, funding for our arrears to the United 
Nations is not within the jurisdiction of this Subcommittee. But since 
we have you here today, I feel obligated to mention the terrible 
situation of our debt to the UN. I believe it is outrageous and 
embarrassing that the United States--the wealthiest country in the 
world--is the biggest deadbeat at the UN. The U.S. has a tremendous 
amount of influence within the UN, but that level of influence is 
decreasing with every day that we don't pay our arrears. In fact, as 
you know very well, at the end of this year we face the unimaginable 
prospect of losing our vote in the General Assembly under the 
requirements of Article 19. Few people in the U.S. government are more 
qualified than you to talk about what our debt to the UN has done to 
our ability to lead in that organization. Can you comment on this 
matter?
    Answer. The U.S. must pay its debts to the United Nations. Until we 
do, our negotiations in all areas are set back by the U.S. arrears to 
the United Nations.
    The U.S. has important interests in the work that the UN and other 
international organizations do. These include our security interests in 
UN peacekeeping in Lebanon, Cyprus, and elsewhere, and in multilateral 
sanctions against Iraq; our economic interest in the protection of 
intellectual property rights and fair worker standards; and our 
humanitarian interest in feeding children, fighting disease, and caring 
for the world's refugees.
    Our ongoing arrears undermine our leadership at the UN, often 
precisely in those areas where we are trying to institute improvements. 
Our negotiations in all reform areas are set back by the arrears. We 
lost a seat on the UN's key budget committee. Many argue that we are 
not trying to improve the UN, but simply save ourselves money. This 
gives our opponents a cheap point on virtually every substantive and 
financial issue.
    We must not hazard losing our vote in the General Assembly due to 
the arrears. We would lose our ability to shape Assembly decisions on 
such matters as the UN budget, the selection of Security Council 
members, and ensuring a fair deal for U.S. business in UN procurement. 
We would be less able to advance our interests in the UN's major 
policy-setting bodies and face greater resistance to the selection of 
our candidates for UN posts. We would have less credibility as a 
proponent of UN reform, and the steady barrage of criticism we already 
receive for our failure to meet UN obligations would become an 
avalanche.
    This does not have to be, and we hope it will not be. We remain 
determined to persuade Congress to make the payments we owe. The 
success of the United Nations matters greatly to the United States.
                                  Iran
    Question. The State Department report I read from earlier also 
talks about Iran's continued support of terrorism. It states, ``Iran 
continues to support terrorist groups that use violence to oppose the 
Middle East peace process.'' The report also accuses Iran of using its 
diplomatic facilities to plan and facilitate activities. Does Iran 
still provide support to Hamas, Hezbollah, and Islamic Jihad? If Iran 
is successful in gaining nuclear, chemical, and biological weapons, it 
could change the face of modern terrorism. Is it possible that Iran 
will use these weapons in terrorist attacks? What are we doing to stop 
them?
    Answer. As stated in the recently released State Department report 
1998 Patterns of Global Terrorism, Iran continues to furnish assistance 
to Hamas, Hizballah, Islamic Jihad, and other groups in the form of 
money, weapons, munitions, and training.
    Iran is also continuing its efforts to develop a nuclear weapons 
capability, but we believe the reluctance of most nuclear suppliers to 
provide assistance to Tehran has impeded these efforts. Iran is also 
pursuing its indigenous chemical and biological weapons production 
capabilities. We vigorously oppose Iran's efforts to acquire weapons of 
mass destruction and are using every means at our disposal, including 
sanctions and diplomatic pressure, to stop other governments from 
assisting Tehran.
    Question. On the question of Iran's acquisition of advanced weapons 
technology, I remain concerned about Russian proliferation of ballistic 
missile technology to Iran. I commend you for the aggressive role the 
Administration has played in pressuring the Russian government to 
combat the transfer of ballistic missile technology to Iran. Can you 
update us on the status of U.S. efforts--and the Russian response--on 
this matter?
    Answer. Despite the Russian government's nonproliferation and 
export control efforts, Russian entities continue to cooperate with 
Iran's ballistic missile program, and to engage in nuclear cooperation 
with Iran beyond the Bushehr reactor project. Although we had seen some 
improvement in Russia's efforts to crack down on such activities during 
the first half of 1998, we have seen backsliding since then.
    During the past year, the USG imposed penalties on ten Russian 
entities. In January, the Administration used existing authority to 
impose administrative measures against three Russian entities for their 
nuclear- and missile-related cooperation with Iran. Last July, we took 
the same action against seven Russian entities involved with Iran's 
ballistic missile program.
    In addition, we are continuing our longstanding, broad, and 
intensive efforts to stop proliferation. We and our allies continue to 
press the Russian government to end cooperation between Russian firms 
and the Iranian missile and nuclear programs and to bolster its export 
control and enforcement capabilities.
    As part of this effort, U.S. and Russian experts in the past two 
months have developed an action plan to address some of our most 
pressing missile proliferation concerns, including development on a 
priority basis of internal compliance offices at several Russian 
entities. We have developed a similar plan for the nuclear area that 
also includes enhanced export control measures. U.S. and Russian 
experts met in late April to begin implementation of these plans.
                               East Timor
    Question. The negotiations between Indonesia and Portugal over the 
political status of East Timor have made tremendous progress in recent 
months. I (Rep. Lowey) am hopeful that these talks, when completed, 
will result in a framework for East Timorese independence. But I remain 
concerned about ensuring a peaceful transition process that protects 
human rights and democratic principles in East Timor. I strongly urge 
the Administration to make it very clear to the parties to the 
negotiations and East Timores leaders that the United States stands 
ready and willing to assist in this transition. To ensure a successful 
and peaceful transition to an independent and democratic East Timor, 
the United States must be ready to offer bilateral political and 
economic assistance to East Timor and Indonesia. We must also support 
United Nations and international community efforts to encourage a 
careful and measured transition that avoids creating a power vacuum in 
East Timor, which would almost certainly lead to bloodshed. In the next 
several days, I will be sending President Clinton a letter--signed by 
55 of my colleagues--asking him to make our support for this transition 
process clear. Would you like to comment on this matter?
    Answer. We share your concerns. The U.S. welcomed the formal 
signing on May 5 in New York of a U.N.-mediated agreement between 
Indonesia and Portugal on East Timor. We have strongly supported these 
negotiations and believe that the agreement to have the U.N. conduct an 
August 8 ballot by East Timorese on an Indonesian autonomy proposal is 
the best approach to achieving a peaceful resolution of East Timor's 
status.
    President Habibie has said that, if the East Timorese reject 
autonomy, he will recommend that the Indonesian People's Consultative 
Assembly (MPR), the nation's highest legislative body, revoke its 
annexation decree and allow East Timor to separate for Indonesia. We 
strongly support a peaceful transition in East Timor, whether the 
people choose autonomy or independence.
    We also are deeply concerned over continuing violent activities of 
civilian militiamen who seek to bias the August 8 vote through terror 
and intimidation. President Clinton has written President Habibie about 
the militia situation. I and other senior U.S. officials have discussed 
the matter with Indonesian government and military authorities and will 
continue to do so. We believe it essential that the Government of 
Indonesia take immediate steps to ensure overall security for all in 
East Timor, to protect U.N. personnel, and to create an atmosphere in 
which the vote can be fair, peaceful and free of intimidation, 
consistent with its agreements.
    We are finalizing details of our voluntary contribution to support 
the U.N. mission in East Timor. We appreciate efforts in Congress to 
provide new money for this purpose. We are working closely with other 
interested states to ensure that the U.N. has the financial means and 
diplomatic support to make its effort a success.
                              Middle East
    Question. Last year, then Israeli Finance Minister Ne'eman--
encouraged by Chairman Callahan--developed a plan to restructure U.S. 
foreign assistance to Israel over the next decade. This plan gradually 
eliminates U.S. economic assistance to Israel over ten years, while 
bolstering security assistance to Israel. Under the plan, Israel should 
receive $960 million in Economic Support Funds and $1.92 billion in 
Foreign Military Financing in FY 2000. While the Administration's 
request for Israeli FMF was at the agreed upon level--for which I 
commend you--the ESF request was $30 million less than the Ne' eman 
plan called for. Can you explain this disparity?
    Answer. We continue to discuss with the Israeli Government the 
future reductions in U.S. economic assistance to Israel.
    In late January 1998, Israeli Finance Minister Yaacov Ne'eman began 
discussions with Members of Congress and Administration officials on a 
proposal that would gradually reduce Israel's annual $1.2 billion 
economic assistance to zero, while phasing in a $600 million increase 
in military assistance over the same period. We welcomed the Israeli 
government's initiative and have been working closely with Israel and 
the Congress to further develop the concept.
    While we agreed that it was time to adjust the level of assistance, 
negotiations continue on the exact funding levels for each year. The 
key elements, a gradual ten-year reduction in ESF combined with a 
steady increase in FMF, however, remain the same. Discussions continue 
between the Administration and the Government of Israel on this 
proposal.
    Question. Can you update us on the peace process in the Middle 
East? Specifically, I'd like to know the status of the security 
cooperation between Israel and the Palestinian Authority? In the past, 
PA cooperation with Israeli officials in the fight against terrorism 
has been somewhat inconsistent and uneven. Has the situation improved 
at all?
    Answer. We believe the Palestinian security organizations are 
making a very serious and credible effort to combat terror.
    For example, acting on information developed through their own 
investigations, PA security forces have been prevented a number of 
terror operations, including what could have been a very serious attack 
in Tel Aviv in March. The Israeli government commended this PA security 
operation and others.
    Our standard is that the Palestinians must do everything they can 
to prevent terror, both unilaterally and in cooperation with Israel.
    We will continue to insist that the Palestinians meet that 
standard.
                             Russia/Israel
    Question. I want to thank you for the Administration's continued 
strong support of the program to resettle Jewish refugees in Israel 
from the former Soviet Union, Ethiopia, and other nations. The FY 2000 
request of $60 million, which Congress suggested in the FY99 Foreign 
Operations Report, will ensure the continued success of this critical 
program. I am concerned about recent reports of increased anti-Semitism 
in Russia. Could you comment on the situation there and how it might 
affect the number of Jews emigrating from Russia to Israel?
    Answer. President Clinton and I share your concern about the 
increased anti-Semitism in Russia. Anti-Semitism is unacceptable and 
damages Russia's reputation. We have made senior Russian officials 
aware of our views, and this issue figures prominently in our bilateral 
agenda. When I was in Moscow in January, I raised this issue many times 
in both public and private meetings.
    Anti-Semitism, racism and extremism must be opposed firmly and with 
vigilance. In this connection, we commend the resolute statements of 
President Yeltsin and his government condemning anti-Semitism and other 
expressions of ethnic or religious hatred. Unfortunately, weaknesses in 
Russia's law enforcement capability have made it more difficult to 
combat anti-Semitism.
    As for Jewish emigration, it is difficult to predict how anti-
Semitism might affect the number of Jews emigrating from Russia to 
Israel. However, the Department of State continues to monitor the 
situation closely, and to seek opportunities to promote tolerance in 
Russia.
                              Middle East
    Question. Last year, you expressed the hope that the U.S. could 
begin the process of improving its relationship with Iran. We had 
reason to hope that Iranian President Khatemi would take a more 
conciliatory approach to bilateral relations between our two countries. 
Unfortunately, Iran's actions in the last year have suggested that it's 
business as usual there. In fact, the State Department reported last 
month that ``Iran continues to pursue policies that threaten the 
interest of the U.S.,'' and ``Iran continues its drive to acquire 
[weapons of mass destruction] and recently tested a medium-range 
ballistic missile capable of hitting our allies and U.S. forces 
abroad.'' When we compare President Khatemi's comments last year with 
Iran's actions since then, something is not right. Can you comment? Is 
President Khatemi actually in charge in Iran, or does he follow 
marching orders from the more extreme clerical leaders in the country?
    Answer. While President Khatemi has undertaken a reform agenda 
domestically in Iran that has seen some success, we have not observed 
similar changes in those policies of greatest concern to us. We 
continue to be concerned about Iranian support for terrorism, 
opposition to the Middle East Peace Process, development of weapons of 
mass destruction and their delivery systems and Iran's human rights 
record.
    President Khatami exercises authority over much of the Iranian 
government, but is outranked by Supreme Leader Khamanei on issues 
involving the Iranian armed forces, the Revolutionary Guards, the 
Judiciary and the Ministry of Intelligence. In addition, powerful 
foundations called ``bonyads,'' which control the holdings of the 
former Shah and figures associated with his regime, report directly to 
the Supreme Leader, and not President Khatami. The bonyads exercise a 
significant impact on Iranian economic activity.
    Khatami's election two years ago alarmed conservative elements in 
Iran. As Khatami has pressed for change in both domestic and foreign 
affairs, these conservatives have resisted. The outcome of this 
struggle will depend in great part on the evolving power relationships 
among Khatami, Supreme Leader Khamanei and Expediency Head (and ex-
president) Rafsanjani.
    The Iranian public apparently supports Khatami and his agenda of 
promoting the rule of law, reducing government intrusion into people's 
lives, and increasing freedom of expression.
                                 ______
                                 

          Questions for the Record Submitted by Ms. Kilpatrick

                               __________
                                 Kosovo
    Question. Could you explain President Clinton's designation of the 
airspace above and the water's adjacent to the FRY and Albania as 
combat zones in his April 1999 Executive Order?
    Answer. Pursuant to section 112 of title 26, U.S. Code, a member of 
the Armed Force of the United States may exclude from gross income 
compensation received (subject to a dollar limit for commissioned 
officers) for active service for any month during any part of which is 
served in an area that has been designated by the President as a combat 
zone for purposes of this section. Executive Order 13119 (April 13, 
1999) was issued to allow service members to benefit from this income 
tax benefit.
    Question. Has the Administration asked the government of Yugoslavia 
to consider the three captured Marines as prisoners of war and 
therefore treat them according to the Geneva Convention? If so, 
wouldn't this suggest that they were involved in a war? Are we in fact 
at war with the government of Yugoslavia? Since the Constitution says 
that only Congress can declare war, why has it not been asked to 
declare war?
    Answer. We believes that the three captured servicemembers were 
entitled to the protections accorded by the Geneva Convention of 1949 
as prisoners of war. Their status does not suggest that we are ``at 
war.'' Indeed, the Geneva Conventions apply to all armed conflicts, and 
bind all parties to such conflicts, regardless whether the conflicts 
are labeled as wars. We do not consider ourselves to be ``at war'' with 
Yugoslavia or its people. NATO is acting to deter unlawful violence in 
Kosovo that endangers the stability of the Balkans and threatens a 
wider conflict in Europe.
    We believe that a Congressional declaration of war would be 
unnecessary and unwise. As you know, the House of Representatives 
rejected a resolution to declare war on April 28, 1999. A declaration 
of war could have serious negative effects on NATO cohesion, regional 
stability, and relations with Russia. The President has taken his 
actions pursuant to his broad Constitution authority as Commander-in-
Chief and Chief Executive and to conduct the foreign relations of the 
United States. The President has taken into account the views of 
Congress. He has complied with the Roberts Amendment by consulting with 
and reporting to Congress prior to deploying additional ground forces 
to the region, and, consistent with the War Powers Resolution, he has 
kept Congress informed concerning deployments of U.S. forces to the 
region.
    Question. The American naval base at Guantanamo Bay in Cuba has 
been criticized by some refugee groups as more like a prison than the 
``safehaven'' described by the Clinton administration. Is where the 
refugees will be relocated to still up for debate?
    Answer. The administration is no longer considering the use of 
Guantanamo Bay as a transit site for these refugees. Refugees are being 
processed for admission to the United States on two tracks. Those with 
relatives in the U.S. who have applied to sponsor cases with 
appropriate resettlement agencies in the U.S. are undergoing full 
refuge processing in Macedonia and are arriving to be immediately 
united with their family in the U.S. Those who have been identified as 
vulnerable and in need of resettlement due to conditions in refugee 
camps are being moved to Fort Dix, New Jersey, following a brief 
process including INS adjudication interview in Macedonia. At Fort Dix 
they undergo final processing (medicals, etc.) and sponsorship is 
arranged. They are expected to move into U.S. communities two to four 
weeks after arrival at Fort Dix.
    Question. What steps are being taken with regard to family 
reunification? What will be the distribution of responsibility among 
NATO, the U.S. military, and Non-governmental organizations for the 
care and maintenance of refugees at Guantanamo Bay or elsewhere?
    Answer. The U.S. program emphasizes family reunification. First, we 
do not unduly separate families in the region during processing for 
relocation. Second, we are making efforts to unite refugees with 
relatives in the U.S. The program for moving refugees in vulnerable 
circumstances from refugee camps in Macedonia to Fort Dix, New Jersey, 
involves the cooperation of the UNHCR and the International 
Organization for Migration (IOM) overseas. Domestically the Department 
of Health and Human Services (HHS) coordinates the effort with the 
support of DOD, representatives of non-governmental organizations, and 
the American Red Cross. Refugees with family in the U.S. complete 
processing overseas and are not required to transit Fort Dix.
    Question. Western officials and human rights groups say that scores 
of women have reported being raped since the Belgrade government 
started waging all-out war in Kosovo. Within our humanitarian relief do 
we address any rape-related concerns?
    Answer. There have been repeated reports of the Serbian army raping 
Kosovar Albanian women and our humanitarian efforts do address rape-
related concerns. In addition to health care, several of the NGO and UN 
agency programs funded by the USG provide psychosocial counseling to 
traumatized women.
                       U.S. Contribution to UNDP
    Question. I am concerned about the drastic dip in United Nations 
Development Program (UNDP) funding from $100 million in FY 1999, to an 
Administration request of $80 million for FY 2000. I am also concerned 
that linked to this anticipated drop in funding is a decrease in 
leveraged influence regarding selection of the new Program 
Administrator. This post has traditionally been held by an American. It 
is the highest ranking position an American has held in the UN system 
and carries the rank of Deputy Secretary General. As you know, ninety 
percent of UNDP's core resources reach countries that are home to 
ninety percent of the world's poorest people. UNDP helps people in 174 
countries and territories to help themselves, focusing on poverty 
elimination, environmental regeneration, job creation and the 
advancement of women. Contributions to UNDP come from nearly every 
government in the world and for every dollar contributed by the U.S., 
we receive a return of more than 2:1 in procurement of American goods 
and services. This funding is both socially effective and fiscally 
responsible. It helps the poor, fosters democracy, and ultimately it 
helps Americans. Recognizing all of this, why did the Administration's 
UNDP funding level request drop so drastically?
    Answer. Our reduced FY 2000 request for the United Nations 
Development Program (UNDP) is an unfortunate consequence of the severe 
funding constraints under which we continue to operate and our efforts 
to keep spending within the limits established by the 1997 budget 
agreement.
    We agree that UNDP programs serve a number of very important U.S. 
national interests, and continued U.S. support for UNDP efforts remains 
essential. UNDP is aggressively promoting broad U.S. objectives such as 
democracy, good governance, sustainable development and peace building.
    Over the last five years, UNDP has made a number of management 
reforms and cooperated in strengthening the coordination of UN 
development activities both at headquarters and in the field. We expect 
this process to continue under the leadership of Mark Malloch Brown, 
who the Secretary-General has chosen to be his new Administrator.
                                Refugees
    Question. I would like to thank you for focusing on improvement of 
the first asylum conditions in terms of basic health, water and 
sanitation, and shelter--for the most vulnerable refugee populations, 
particularly in Africa. Recognizing the devastating impact that HIV/
AIDS is having on Africa's population, it seems that refugee camps 
would be an important location to access and educate a dense and 
particularly vulnerable population regarding how to reduce the spread 
of HIV. Is the U.S. involved in any HIV/AIDS education or prevention 
efforts in refugee camps in Africa?
    Answer. Yes, indeed, HIV/AIDS awareness and prevention is included 
in the basic primary health care (including reproductive health) and 
community services programs (including education) in almost every 
refugee camp setting in Africa. We fund such health care programs in 
all of the major refugee situations in Africa through the U.N. High 
Commissioner for Refugees (UNHCR) and non-governmental organizations 
such as the International Rescue Committee, the American Refugee 
Committee, and the International Federation of Red Cross/Crescent 
Societies. I would note that this is also true in other regions of the 
world given the universality of the threat.
    The methodology may differ among refugee populations For example, 
all of the reproductive health care programs fro West Africa to the 
Horn--a sector where common minimum standards have been developed and 
are carefully implemented--would include an element on HIV/AIDS. In 
some settings, such as Guinea, health education (including HIV/AIDS) in 
the refugee schools is part of the program for adolescents from Liberia 
and Sierra Leone. In Cote d'Ivoire, refugee women engaged in 
International Rescue Committee--implemented income-generating 
activities and business skills classes decided to add HIV/AIDS 
education/prevention to their sessions.
                     Refugees: Africa/Sierra Leone
    Question. I would like to commend you and thank you for increasing 
the refugee ceiling for Africa from 6,888 in 1998 to 12,000 in 1999. As 
you know, in countries such as Sierra Leone, people are trying to leave 
the country and flee to safety en masse. I have many constituents with 
family members trapped by the conflict. They are concerned about the 
loss of relatives who are trying to leave the country. Are we currently 
doing anything beyond the norm to help these refugees?
    Answer. Sierra Leon is in the ninth year of a tragic civil war. 
Last year, the USG gave over $60 million for Sierra Leonean refugees 
and regional peacekeeping. So far this year, we have spent nearly $43 
million, including emergency aid following the violent rebel attack on 
Freetown in January. This includes over $2 million in additional 
emergency fund for refugees in Guinea and Liberia.
    Security and access remain serious constraints in Sierra Leone, 
both in terms of supplying aid to the needy and in allowing refugees to 
flee danger. We have pressed both sides to allow humanitarian access. 
In the meantime, we have encouraged negotiations while reinforcing 
ECOMOG, and sought to halt the flow of arms in the region. Until the 
parties reach a political settlement, the people of Sierra Leone will 
remain desperate for the assistance we provide.
    We are continuing to resettle Sierra Leonean refugees in the United 
States, including a number of the atrocity victims who managed to flee 
to Guinea. As refugee resettlement is available only for those who have 
fled their country it is not a mechanism for rescuing those still 
inside the country.

 
                           W I T N E S S E S

                              ----------                              
                                                                   Page
Albright, Hon. M.K...............................................   281
Bodner, James....................................................    69
Holum, J.D.......................................................    69
Newsom, E.D......................................................   233
Rubin, Hon. Robert...............................................     1
Schuerch, W.E....................................................     1
Slocombe, W.B....................................................   233

 
                               I N D E X

                              ----------                              

                       Secretary of the Treasury
                         (Hon. Robert E. Rubin)

                                                                   Page
Adjustment Programs..............................................    65
Bilateral vs Multilateral Debt Policy............................    66
Budget Request...................................................    15
Chairman Callahan's Opening Statement............................     1
Core Labor Standards.............................................    26
Debt Relief......................................................    62
Exceptional Performers...........................................    64
HIPC Debt Relief.................................................    31
HIPC Expansion...................................................    63
HIPC Export Ratios...............................................    64
IMF Gold Sales...................................................    63
RI Responsibility for Bad Loans..................................    67
Marshall Plan for Africa.........................................    62
Mobutu Debts.....................................................    66
Mozambique.......................................................    66
Ms. Pelosi's Opening Statement...................................     3
President's Initiative...........................................    63
Secretary Rubin's Opening Statement..............................     4
South Africa.....................................................    67
Standards for Sound Performers...................................    64
Uganda Experience................................................    65

                          Security Assistance
(James Bodner, Principal Deputy Under Secretary of Defense for Policy; 
   John Holum, Acting Under Secretary of State for Arms Control and 
                    International Security Affairs)

Africa...........................................................   138
African Crisis Response Initiative...............................   165
Agriculture......................................................   156
Azerbaijan.......................................................   157
Black Hawk Helicopters...........................................   146
Bosnia...........................................................   141
Chairman Callahan's Opening Statement............................    69
Colombia.........................................................   127
Comprehensive Nuclear Test Ban Treaty (CTBT).....................   155
Egypt Arms Deal................................................163, 229
Environmental Diplomacy........................................132, 161
Export Import Bank...............................................   147
Foreign Military Training........................................   162
Human Rights Vetting.............................................   167
IMET...........................................................144, 165
Indonesia........................................................   136
Israel.........................................................143, 229
Jordan...........................................................   229
KEDO.......................................123, 130, 133, 148, 160, 164
Landmines........................................................   144
Latin America....................................................   230
Military Training Report...................................35, 165, 230
Mr. Bodner's Opening Statement...................................    99
Mr. Holum's Opening Statement....................................    72
Ms. Pelosi's Opening Statement...................................    70
No Sweat Shop Initiative.........................................   161
Non-Proliferation and Disarmament Fund...........................   162
North Korea......................................................   154
Peru-Ecuador Peace Agreement...................................130, 160
Resources/DOD....................................................   226
Russia/Iran......................................................   158
Russian Arms Transfers to Iran and the Middle East...............   151
School of the Americas.........................................145, 226
Security Assistance Policy.......................................   163
Voluntary Peacekeeping Operations................................   153
West Bank and Gaza...............................................   153

                        Military Training Report
  (Walter B. Slocombe, Under Secretary of Defense for Policy; Eric D. 
  Newsom, Assistant Secretary of State for Political-Military Affairs)

Allocation of Resources and Appropriated Funds.................272, 279
Benin Training...................................................   274
Colombia.......................................................257, 275
Decision on Training.............................................   273
Foreign Military Training........................................   254
Guatemala.................................................256, 267, 271
Human Rights.....................................................   256
IMET.............................................................   256
Indonesia........................................................   277
JCET Training..................................................269, 278
Kopassus.........................................................   259
Military Training Activity.......................................   263
Mr. Callahan's Opening Statement.................................   233
Mr. Newsom's Opening Statement...................................   247
Mr. Slocombe's Opening Statement.................................   236
Ms. Pelosi's Opening Statement...................................   234
Oversight........................................................   263
Readiness........................................................   278
Reporting Requirements...........................................   274
Responsiveness of Training Report................................   280
Safeguards on Use of Funds in Both Bills.........................   272
Sandia Nuclear Lab...............................................   254
Service Sponsored Academy Scholarships...........................   276

                           Secretary of State
                      (Hon. Madeleine K. Albright)

Budget Caps......................................................   393
Budget Resolution................................................   333
Burma............................................................   373
Caspian Oil Basin................................................   376
Central America Disaster.........................................   391
Chairman Callahan's Opening Statement............................   281
China............................................................   392
Colombia.........................................................   373
Development Assistance Priorities................................   382
Diplomacy........................................................   332
East Timor.......................................................   396
Family Planning..................................................   394
Front Line States.........................................368, 387, 388
Funding Concerns...............................................327, 331
Haiti............................................................   380
Importance of Foreign Aid........................................   332
Indonesian Elections.............................................   372
Iran............................................371, 383, 384, 385, 395
Israel...........................................................   397
Kosovo......................323, 330, 374, 376, 377, 379, 388, 389, 390
Macedonia........................................................   368
Middle East...............................................393, 396, 397
Military Training................................................   391
Montenegro.......................................................   368
Mr. Young's Opening Statement....................................   322
Ms. Pelosi's Opening Statement...................................   283
NATO.............................................................   326
North Korea......................................................   382
Opposition to Ground Troops......................................   327
Refugee Children.................................................   389
Refugees.......................................................399, 400
Rule of Law Programs.............................................   365
Russia...............................................375, 384, 392, 397
School of the Americas...........................................   385
Secretary Albright's Opening Statement...........................   284
Serb Propaganda..................................................   380
Terrorism........................................................   381
The Middle East Peace Process....................................   386
Ukraine..........................................................   375
UN Arrears.......................................................   390
UNDP.............................................................   399
United Nations...................................................   394
Wye............................................................368, 370